So the Lithium Bubble Has Burst. What Happens Now?

Alex Koyfman

Written By Alex Koyfman

Updated May 15, 2024

One of the biggest stories that haven't gotten much attention from the press this year is the collapse in lithium prices. 

Trading at all-time peaks in the neighborhood of $85,000 per ton this time last year, lithium is now below $20,000 per ton — a decline of greater than 75% over the course of just 12 months. 

Looking at it without context, one would assume a collapse in the market.

But the reality is that it was last year's manic buying which set us up for the decline, and as manic buying has done many times in the past, opened up a rare, and potentially substantial window of opportunity.

Lithium, seen as the successor to oil in the era of decarbonization, was the hot commodity through the early years of the decade. 

Tesla, which grew into the most valuable car brand in the world in a matter of just a few years, represented the vanguard of a societal push for electrification. 

Our phones, our cars, our buses and trains, all run by lithium. It was the next greatest thing that would propel us into the future. 

So, as the case had been with so many macrotrends in the past, the retail investors piled in, spurring more interest from the institutions, which spurred more projects, which spurred even more investing, and so on. 

While lithium has been often compared with oil, the feedback loop of excitement wasn’t too far removed from another famous mania buying event – the frenzy leading up to the dotcom bubble collapse of the early 2000s. 

Today, that bubble seems to have burst for lithium. But if we’re to follow the pattern set by the dotcom bubble two decades ago, the tech industry was far from finished when the Nasdaq 100 hit a bottom in late 2002. 

In fact, it was just getting started. 

From Dotcom Bubble To Tech Obsessed World

With the exuberance gone, and the weak hands out of the picture, investment in tech, and the overall tech market cap has been growing steadily since the early 2000s. And today the tech sector’s products and services are more important to us than ever. 

More than 90% of Americans are now online, verses just over 40% in the years immediately preceding the dotcom bubble collapse.

internet usage chart

Lithium, whose universal power storage potential is playing a similarly expanding role in today’s world, is all but guaranteed to follow a similar path. 

Last year marked the high water mark for lithium investment exuberance. 

Right now, with lithium trading at $19,000 per ton, we’re thoroughly inside that trough. 

The exuberance is gone. The weak hands have left the market. Demand, pushed by the EV and wireless device markets, is set to soar for at least the rest of the decade while reserves are already dwindling.

MI Black Lithium Image 13

And there is only one place to go from here. 

Remember what Nathan Rothschild was famous for saying about buying when there’s blood in the streets? 

Well, this is that time. 

You Know What To Do With Lithium… Now The Question Is: How?

Now, if you invest in most any medium-large sized lithium miner today, you will likely be up high double digits by this time next year. But for those willing to inject some calculated risk into an already highly potent cocktail of market factors, there is a far more powerful play to make. 

For months now, I’ve been following a lithium technology company that’s using a new and unique method for lithium extraction to produce salable lithium, in record time, from oilfield brine. 

This method, which has been described by Goldman Sachs as "a game changer" for the industry, can extract lithium from most any fossil fuel resource, going from inception to production in only a few months time — a substantial improvement over the decade-long lead time required at most any hard rock lithium assets. 

The company is young, small, and operating in a field where only a few other, far larger players have set foot. 

With commercial production now only several months away, this $20M market cap firm is positioned perfectly just as lithium prices climb back into the $30k/ton range by the middle of next year. 

Almost Any Lithium Investment Will Make You Money. Only A Select Few Will Make You Rich

Want to learn more about it?

I’ve recently released this video presentation to our Energy and Capital readers. 

It’s quick and entertaining, and will open your eyes to what I believe is nothing less than a venture-level investment opportunity, available to anybody through the public markets. 

The technology is proven. A pilot plant is in operation. Best of all, the tech is scalable and capable of giving any fossil fuel company a turn-key method for diversifying into tomorrow’s most important energy-storage medium. 

You can probably imagine the licensing opportunities with major oil brands. 

Just about any lithium investment will make you money in the next 12-18 months. Only a few, however, will turn a small bet into a life-changing win.

This may be the best of them.

For instant access to my presentation, enter here.

Fortune favors the bold,

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Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.

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