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Cryptocurrency's 80 Percent Plunge Is Now Worse Than the Dot-Com Crash (bloombergquint.com)
Zorro shares a report from BloombergQuint: The Great Crypto Crash of 2018 looks more and more like one for the record books. As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent. The tumble has now surpassed the Nasdaq Composite Index's 78 percent peak-to-trough decline after the dot-com bubble burst in 2000. Like their predecessors during the Internet-stock boom almost two decades ago, cryptocurrency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check, particularly those in many secondary tokens, so-called alt-coins.
"It just shows what a massive, speculative bubble the whole crypto thing was -- as many of us at the time warned," said Neil Wilson, chief market analyst in London for Markets.com, a foreign-exchange trading platform. "It's a very likely a winner takes all market -- Bitcoin currently most likely." Wednesday's losses were led by Ether, the second-largest virtual currency. It fell 6 percent to $171.15 at 7:50 a.m. in New York, extending this month's retreat to 40 percent. Bitcoin was little changed, while the MVIS CryptoCompare index fell 3.8 percent. The value of all virtual currencies tracked by CoinMarketCap.com sank to $187 billion, a 10-month low. "Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite's recovery to fresh highs 15 years later, and to the internet's enormous impact on society," reports BloombergQuint. "They also note that Bitcoin has rebounded from past crashes of similar magnitude. But even if the optimists prove right and cryptocurrencies eventually transform the world, this year's selloff has underscored that progress is unlikely to be smooth."
"It just shows what a massive, speculative bubble the whole crypto thing was -- as many of us at the time warned," said Neil Wilson, chief market analyst in London for Markets.com, a foreign-exchange trading platform. "It's a very likely a winner takes all market -- Bitcoin currently most likely." Wednesday's losses were led by Ether, the second-largest virtual currency. It fell 6 percent to $171.15 at 7:50 a.m. in New York, extending this month's retreat to 40 percent. Bitcoin was little changed, while the MVIS CryptoCompare index fell 3.8 percent. The value of all virtual currencies tracked by CoinMarketCap.com sank to $187 billion, a 10-month low. "Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite's recovery to fresh highs 15 years later, and to the internet's enormous impact on society," reports BloombergQuint. "They also note that Bitcoin has rebounded from past crashes of similar magnitude. But even if the optimists prove right and cryptocurrencies eventually transform the world, this year's selloff has underscored that progress is unlikely to be smooth."
All of those people stealing bitcoins just got shafted a lot harder than the average small-scale owner. And it makes payout for all that ransomware WAY cheaper!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This is the 4th or 5th time it's plunged like this(percentage basis) since 2010. Why is the outcome this time different? more participants? more awareness? higher market caps? all of those things also bring along new players, lobbyists, proponents and capability to ensure the cycle repeats at some point.
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They're a waste of energy.
Why don't governments allow people to print real money? Just make printing each note a unique and a complicated process that lower intellect folks could barely print off minimum wages/well fare, and creative minds can prosper.
Markets go up, markets go down. It will be back sooner than you think, bigger than before. Bank on it, brother.
NASDAQ companies - those that survived - actually produce goods and services; things of value that people want. Recovery is *almost* guaranteed as those businesses recover.
Cryptocurrencies offer nothing but themselves as the product, and once the public loses faith in their value and ability to exchange them, they have nothing to base a recovery on. All they can hope for is more speculation from people too dumb to learn the lesson the first time.
=Smidge=
...get yer tulips....cheap!
Now with the crash, they will be stuck in mom's basement for a few more years. And that awesome gaming graphics card will have to be moved back to the "wish list".
I fail to understand it. While bitcoin et al have many problems it is still a fascinating evolution. Sure the bankers have been gambling big time on it causing some wild market fkuctuations and it has scalablitiy issues but...
most of the arguments put against it are just plain wrong. Its not like tulips at all its something very new. Sure its only worth what people are prepared to give you for it but this is no different than gold or any fiat currency. I look forward to seeing how this develops in the future.
Tulips have at least some base value, and dont consume continuous and massive amounts of energy just to allow their sale to be recorded. ;)
Tulips are a WAY more sensible investment than Cryptocurrencies
BTW, the story is also BS. The .com crash wiped many many more investors (well, wiped out in a way, because money is only transferred, there were just as many winners - this is often forgotten). A lot of this 'lost value' in cryptocurrencies was never traded, it was just huge percentages of the total coins held by a few whales.
ie: those static amounts went up, went down, but were never realized. This makes a big difference.
Then again, boom bust cycles are a great tool for those in control to extract money from the middle classes - who are always the investors who lose out (and dont get bailed out, ever..) - which is why you will never see effective regulation of such things.
Like being able to transfer value across the Internet without a centralized authority? That kind of good or service?
"Everything is worth what its purchaser will pay for it." - Publius Syrus
When many want to buy crypto-currency, and few are willing to sell, price goes up. We saw that.
When few want to buy crypto-currency, while many are looking to sell, price goes down. Now, we're seeing this.
It appears to have great possibilities to solve some problems
Unfortunately, today's crypto currencies seem to only be used for speculation, or to buy drugs or other black market stuff
One of my good friends is a glassworker. He's trying to create an alternative currency based on tokens that are collectable, handmade pieces of art http://www.astarshipineverygar...
In theory, I like alternative currencies
In practice, I'm well aware of the difficulties
> no different than gold or any fiat currency.
If you have any income, you have to pay taxes in fiat currency.
If you keep refusing to pay, eventually they'll put you in jail (after they first seize your assets). Almost everyone NEEDS fiat currency, so that's one big difference. There will always be someone who needs to pay taxes, so there will always be someone who needs dollars. They'll give me something of value in exchange for my dollars in order to pay their taxes.
Pop the battery out of your phone for a second. See those shiny things where the battery connects to the phone? That's gold, it's not Buttcoin. Have any computer motherboard or PC card laying around? See that shiny yellow stuff? That's gold. Gold is needed for real, actually valuable uses.
I just looked and the "currency" bitcoin is still worth $6355 per coin.
I mean i threw them in the garbage back in the day when they were worth only a few cents per coin, so i would think that its still MASSIVELY over valued and can fall much, much further.
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Bitcoin is up almost 55% year-on-year.
Yes, it's volatile. No, it hasn't crashed.
It was all going so well until the WikleVI decided to open Gemini and have funds which they claim are pegged to the dollar.
You CAN'T HAVE an alt.coin or digital fund pegged to the dollar without being... the US Government!!! I know, it seems silly to have to say it, but if all you had to do was invent a name... maybe something stupid... like "twoface" or "the joker" or "the riddler" or "gemini" or "Winklevii" and then issue coinage and claim it's worth EXACTLY a dollar because "we're storing dollars"... ...then every lesser developed country would do it. Do you think south American countries going through 1000% inflation wouldn't LOVE to peg their "petro-currency" to the dollar?
Oh WinkleVii, WinkleVii, WinkleVii. You're not just sore losers (yeah, Facebook, right?) but now you're also bitcoin losers and Gemini fund losers.
Time to go out there and buy more matching suits!
E
It's equally valid to say that cash has increased in value by 400% against cryptocurrency. You should buy dollars now! Disclaimer: some cryptocurrency people are saying that the current value of cash is just a bubble.
In other news, cash held fairly steady against other easily tradable commodities, with no major movement.
When a bunch of people decide to play musical chairs, they are gambling on whose gonna get cast aside and whose going to get a chair. That's cryptocurrency, except that people used real money to buy their spot in the game.
As long as such a game goes on, people who've already "invested" (bought-in to the poker game) imagine that they are "investing" rather than gambling, and they will happily encourage more people to buy-in (which drives up the value of the crypto tokens of those who already own them). Unlike an actual investment, however, at the end of the exercise there is no there there - there's nothing of any intrinsic value for the last people in the game to claim actual ownership of. This is a classic pyramid scheme (which is why such schemes are generally illegal in the US) which, like a perpetual motion machine is completely impossible and is 100% certain to burn the later generation of participants - in fact the cashing-out of some early investors is great advertising which leads to a later generation of fools investing. Google: "Ponzi"
people with brains tend to frown on century-old scams that ALWAYS collapse and harm people, no matter how much makeup you slather onto them.
Cryptocurrency is a classic Ponzi scheme where early investors cash out with lots of "free" money and fabulous returns which were actually generated by a later wave of investors. Eventually, there are investors who want to cash out with their supposed easy money lavish profits and they discover that there is not another wave of idiots lined up behind them willing to buy worthless stuff for even higher prices and the whole thing collapses leaving the last investors with absolutely nothing. At least if they had invested in a pencil factory and it had collapsed, there would be a physical plant and machinery and probably some unsold pencils that could all be liquidated to gather up a bit of cash to partially repay investors. With cryptocurrency there is nothing for the investors left holding the bag - they get completely wiped out without even pennies on the dollar.
I don't see an 80% plunge ending companies and millions of jobs like the tech bubble bursting did.
Joe Sixpacks, defender of the common man.
they're still used to buy drugs, which keeps the value up. Also money laundering. Now, if the gov't cracks down on the laundering plus legalizes drugs...
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Everyone, and I mean EVERYONE and ANY ONE over the age of 40 knew this day would come. First, these are NOT currencies but simple betting and speculation. Everyone who lost money should look in the mirror and say, "I'm greedy. I'm stupid. I deserve this. That is what gambling is all about."
There's absolutely no way any cryptocurrency will ever gain a foothold as a currency used for every day transactions if the best it can offer is, as you said, 80% price plunges every two or three years.
That still wouldn't be a problem if transactions were quick, cheap, and you'd have some intermediate store of value.
Say I receive X Bitcoin as payment for a job, and buy X Bitcoin worth of coffee beans for that. Then I sit on that for a year (Bitcoin goes up to 15x what it was when I bought the coffee beans), I sell the coffee beans for 1/15X worth of Bitcoin, and exchange that into whatever 1/15X Bitcoin is worth then. Most likely, somewhere near the price of that stack of coffee beans I started with.
That would be entirely feasible if transaction costs were low, transactions quick, with enough intermediate stores of value to choose from. But from what I've read transactions are slow and/or costly. Meaning the exchange rate may go up or down 10-20% or more while I'm waiting for a transaction to go through. And for small exchanges, transaction costs may be a significant part of the total. Not to mention the limit # of places that will take Bitcoin as payment. That is why it's no use for every day transactions.
LOL at all the suckers!
In the past the crashes were caused by liquidity, confidence and people trying to take their profit. (Or Mt. Gox covering their stupidity) This crash was caused by people having to sell to pay electricity bills. With a normal stock or commodity there are natural sellers. The people who mine silver have to pay the mining cost, when GM sells stock they do it to retool or invest in themselves and they will repeatedly sell more and more. There is also a natural ceiling on the value of GM stock. If the price gets crazy GM will sell more and horde the cash. With crypto currency we had huge market caps but most of the coins were held by a few people who had no need to sell. There was no theoretical max value of the currencies. You couldn't short crypto because you were literally exposed to limitless losses. The only major forced selling before mining went insane was MT Gox and every time they sold the markets would crash.
Nothing of value lost, not even money.
"The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
I'll be interested what happens mid Dec, as that nearly 20K peak starts to roll off the edge of yearly graphs, and bitcoin looks like nothing but a downward spiral. Sure it is still worth a sh*t ton more than it was even 2 years ago, but for the vast majority of the uneducated folks that invested in it and all they see is that 1 year graph of nothing but down, I expect a sh*tstorm of people selling
Cry me some crypto-tears. Buy more AI stock to take your mind off it.
Table-ized A.I.
That would be true if the USD is the only currency in the world. It isn't.
Don't fight for your country, if your country does not fight for you.
One of the great feedback loops that usually drives a property or stock crash is leverage. If you get underwater on your speculative mortgage, or your margin gets eaten by a stock dip, then you are forced to sell which puts more people into this situation who are forced to sell...
But I have not seen anything suggesting that much of the crypto market is leveraged. This suggests two things. One that this plummet is actually more fundamental. But, that false recoveries are going to distinguish this crash more so than your typical bubble.
Those who took out loans to buy bitcoins etc
This article is sponsored by central banks.
Also, it's not factually correct: Bitcoin has lost 67% of its value (which was primarily pumped by an unnatural spike in interest) and I couldn't care less about altcoins which are colloquially called shitcoins - most of shitcoins serve exactly zero purpose and were created as a means of raising capital and running away with it.
What's different this time is that nearly every human being in the entire world has already heard about it, from janitors to CEOs.
How can Slashdot consider itself a tech site when everyone who posts here seems to be ignorant of the benefits of the blockchain?. Sure, 90% of tokens are dubious to say the least, but there are many which aren't. Those which use the underlying strengths of block-chain technology are about to revolutionize almost every industry. It's about transparency & trust-less protocols, not free money. Research tokens such as: IOTA, RVT, VET, FCT, EOS & POWR to get an idea (Damn, just revealed my portfolio)
Except that it's not 'equally valid'.
See, the currencies are traded openly, and their relative valuations haven't had any major swings other than the usual stuff.
So if the real currencies have been stable, it's complete bullshit to claim that money has gone up relative to Bitcoin.
What the hell are you talking about? Clearly you have no concept of how actual currency markets work ... so you seem like a perfect sucker for BItcoin.
The real currencies have been stable, it's solely the cryptocurrencies which have fluctuated.
You forget the effect of fractional banking. To make a 100 dollar loan the bank doesnt hae to have 100 dollars, they can hold 15 dollars in reserve and make a 100 dollar loan. So say a bank A started with 60 dollars, they make loans of 400 dollars, the folks who took the loans deposited it in Bank B. Bank B now has 400 dolars of reserves, they can now make 2400 dollars of loans to customers who deposit in Bank A. Bank A now has 2400 dollars in reserves and can make 14400 dollars of loans and so on.
To paraphrase your example with fractional banking everytime I raise an object into the air I can have it fall down 6 times and everytime an object falls down it raises an object into the air so now I have 6 objects in the air.
Banking is literally the process of creating money. The Fed (which is a trade union of private banks) exists to make sure bankers dont go crazy with this process. The other check on the system is people dont take out loans just because a bank can offer loans , they do only because they have a real need (something productive which will create value). So as more value is created in the economy you need more money to represent that value so we do need to constantly create new money.
Now whether you create the new money through fractional banking or through solving crypto puzzles is only a question of efficiency. Doing it the traditional way uses less electricity but you spend money on regulatory mechanisms to make sure noone is cheating (counterfeiting, giving loans beyond reserve ratio etc).
The open question is whether the cost of creating money through solving math puzzles is less than the cost of creating it through the FED.
**Life is too short to be serious**
In the Neolithic Age with handtools a person might spend an entire week creating a stone knife. Now it can be made on a CNC machine in 5 minutes and you can order it on Amazon in 30 secs and lets add in another 5 minutes of work done by your USPS delivery guy to get it into your hand. A flint knife is now worth 15 minutes of time instead of a week. Things are way cheaper. We all live pretty much like kings of a bygone era
**Life is too short to be serious**
This is part of the reason when a guy who wanted to be my housemate said his job was a "full-time crypto trader" I passed him over. I wasn't interested in someone who's primary source of income was a ephemeral fad which would inevitably leave me with a housemate who's not able to pay his share.
.. It's Going To Crash!!!
https://www.youtube.com/watch?v=XbZ8zDpX2Mg
Do you know anything at all about money and economies?
"... money is only transferred, there were just as many winners..."
This fails on literally every level!
First of all it's called a "crash" for a reason, and that reason isn't that "winners were created somewhere else". No, lots of people lost their shirts, and it's a near mathematical certainty that the losers outnumber the winner. By a huge margin.
You've conflated money with wealth, and the two are not the same thing.
There are always shorts and people who can win on the downside. That much is true. However betting on decline has historically (and I'm talking about the entire arc of civilization here) been a less popular investment choice. Why? Because on average that's a losing proposition.
Wealth is created constantly, but it can be destroyed too. The episodes of wealth destruction are called "crashes", "depressions", "recessions", and sometimes "the fall of an empire". However these negative events are smaller and shorter than the intervals of building, creation and construction. It's an article of faith that this will always be true. On the other hand, we have about 10,000 years of experience with this and it has generally been true over that 10,000 years. So there's some reason to have faith.
Finally cryptocurrency is getting back to normal. Now that the speculators have been brushed aside, we're seeing normal values again. Bubbles are what happen when speculators artificially inflate the value of something. Cryptocurrency, if used as an investment, is a long term one. Like 10 years. Adoption is just NOW becoming easier. Still, there will be added resistance because of the burnout from the speculative bubble. But ultimately, it's Digital Cash and will be the big thing everyone says it is.
This "news article" clearly looks like very carefully designed to create the impression on the readers "yes things look pretty bad for all crypto"currencies" but nothing to worry about for the long term"!
Likewise, BitTorrent is cool for downloads not requiring a central server, doing large downloads in pieces, etc - but catches hell for association with copyright infringement
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
A sibling post mentioned Beanie Babies and Magic cards.
The volatility there is in extremely powerful old cards printed in very small quantities (at least tiny amounts compared to the current playerbase)
WotC won't reprint those because of a promise not to after an old wave of reprints crashed prices but this causes its own problems.
The last several years of new cards hasn't been so crazy.
Playing the game isn't exactly intrinsic value but it's more than crypto or Beanie Babies have
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
What country with an A or better credit rating and at least a hundred billion* GDP has lost 80% of its currency value in the last 50 years?
None.
* to exclude fake countries like Sealand. Not that they had a major economy ever...