Slashdot Mirror
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."
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.
Website Hosting
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=
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.
> 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.
If you really believed in bitcoin, you'd own up to the fact that in between those 2 numbers, it nearly broke $20,000. Instead, you rely on deception, implying that there was nothing but growth between them.
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.
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.