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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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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.
"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.
> 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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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.
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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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.
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.
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That would be true if the USD is the only currency in the world. It isn't.
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