Financial bubble

A financial bubble is a market phenomenon characterized by a rapid escalation in the price of an asset or asset class, significantly beyond its intrinsic value, followed by a sudden, sharp decline. This concept falls under the broader study of financial markets and is often influenced by factors rooted in behavioral finance. A bubble is typically fueled by strong investor sentiment and speculative demand, rather than fundamental improvements in value. During the inflation phase, prices rise rapidly, encouraging more investors to buy in, driven by the fear of missing out, creating a self-reinforcing cycle.

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