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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."
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=
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's not the possible recovery or lack thereof that is the take-away from this. 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. It's all speculative and highly volatile. Other than suckers continually and cyclically losing their shirts by believing the unregulated pump-n-dump schemes occurring around cryptocurrencies everyone is going to quickly lose interest and move their investment capital over to more secure financial products.
This is the 4th or 5th time it's plunged like this(percentage basis) since 2010. Why is the outcome this time different?
What's different this time is the money supply in crypto has exploded. This was totally not supposed to happen, because each brand of crypto is designed to max out at a mathematically limited number of coins.
At first, this worked, and actually too well. While fiat money can be used as for transactions because the money supply expands as the economy it's based on expands, the most popular cryptos, being in limited supply, began to rise in price (fewer coins to buy the same good). This caused crypto to change from currency to digital investment. As the speculative fever bubbled, entrepreneurs began to offer more new currencies. Crypto "investors" began to treat each one as though it were a new penny stock on the Utah Mining Exchange. Each currency remains in limited supply, but traders kept moving into new currencies, not realizing that this process is like printing Venezuelan fiat banknotes.
Suddenly, people are waking up to what has happened.