Bubbles: what they look like in the data

What counts as a bubble here

Economists disagree on what a bubble is, and a price alone cannot tell a mania from good news that later turned. What prices can show is the shape: a fast climb, then a fall that takes much of it back. Here a month counts as the peak of a boom and bust when:

1. its price was the highest of the five years up to it;
2. it was at least twice the lowest monthly price of those five years — the price had at least doubled;
3. within the next five years, before going above the peak again, the price fell far enough to give back at least half of that rise.

We applied the rule to the monthly prices of six markets: US stocks (the S&P 500 and the indexes it continues, since 1871), gold, silver and Brent oil (since 1960), bitcoin (since 2010) and ether (since 2015). It finds 19 booms and busts: 4 in US stocks, 2 in gold, 3 in silver, 4 in oil, 4 in bitcoin and 2 in ether.

The rule describes a shape, not a cause: some of these were speculative manias, others were shocks — oil jumped in 1990 when Iraq invaded Kuwait. Famous bubbles from before our data — the Dutch tulip mania of 1636–37, the Mississippi and South Sea bubbles of 1720, Britain's railway mania of the 1840s — and Japan's stock and land bubble of the late 1980s have no price series on this site, so they are named here without numbers.

US home prices, at the heart of the 2000s housing bubble, move far more slowly. From July 2001 to the peak in July 2006 they rose ×1.6 — short of the rule's doubling — and then fell 27.4% to February 2012 (35.1% after inflation), the deepest fall in the monthly home price data since 1953. Prices were back at the peak in January 2017. The charts show them beside the episodes, for comparison.

The anatomy of a bubble

Every episode aligned at its peak month: the price as a percentage of the peak, from five years before to five years after, on a log scale (equal steps are equal multiples). The bold line is the median of the 19 paths. Hover or tap a line to see which episode it is; the buttons pick out one kind of market.

On the median path the price stood at 30% of the peak five years before and 55% a year before: the last year alone added +81%. A year after the peak it was down to 62% of it, two years after at 59%. Up by the stairs, down by the elevator: on the way up the median price gained 2.1% a month on average; in the year after the peak it lost 4.0% a month — 2 times as fast. Prices as quoted; the switch shows the same months after US inflation.

Boom, then bust

Each episode's rise into the peak (left, from the lowest month of the five years before) against its fall after it (right, to the lowest month of the next five years). The biggest rise was Bitcoin 2014: ×13.2K from September 2010; the smallest, S&P 500 1881: ×2.4. The deepest fall was Ether 2018: −90.1%.

In 1 of 19 episodes the fall took back the whole rise or more: S&P 500 1929. Ether 2021: the five years after the peak are not over, so the fall may not be either.

How long the way back took

From the peak month to the first month when the price stood at the peak again, the median episode took 8.8 years (counting the ones still below their peak as the longest). The fastest was Bitcoin 2011: 20 months; the longest, Silver 1980: 31.2 years, back only April 2011.

2 of 19 had not regained their peak by October 2026: Oil 2008 and Ether 2021. After inflation the median is 14.2 years, and 4 are still below: Silver 1980, Oil 2008, Oil 2022 and Ether 2021.

Were stocks expensive at their peaks?

Stocks have a yardstick that metals and coins lack: earnings. Robert Shiller's CAPE divides the price by the average of the previous ten years' earnings, both after inflation. At the stock peaks the rule finds it stood at 19.0 (Jun 1881), 32.6 (Sep 1929), 22.2 (Feb 1937) and 42.9 (Aug 2000). Its average since 1881 is 17.8 (median 16.6); the highest was 44.2, December 1999.

In October 2026 the CAPE was 40.7: only 1% of all months since 1881 had a higher one, and it was higher still at the peak of August 2000. A high CAPE says that prices are high against past earnings; it does not say when, or whether, they will fall.

Where the markets stand now

A rule like this names a bubble only after it bursts, so it cannot say whether any market is in one today. It can measure the first half of the shape: how far each price has risen from its lowest month of the last five years. At their latest monthly average the S&P 500, gold, silver and bitcoin stood at least twice their lowest month of the past five years.

The table compares each market's latest monthly average with five years earlier, with its lowest month of the last five years and with its highest month ever, prices as quoted. Over five years the S&P 500 rose ×1.7; its latest month was a record.