Cryptocurrencies Tumble Even More, While One Asset Manager Proclaims 'Bitcoin is Dead' (marketwatch.com)

Cryptocurrency prices "fell sharply on Friday, as another bout of selling took digital currencies to fresh lows," reports MarketWatch, adding that Friday the price of Bitcoin "crashed through support at $3,500, falling more than 10% to a 15-month low at $3,230 on the Kraken exchange."

"What a difference a year makes," CNN Business quipped Friday, in an article headlined "Bitcoin's Epic Plunge Continues": In December 2017, bitcoin prices hit a record high of just under $20,000... Bitcoin is at a 15-month low. But prices have really gotten whacked this week, falling nearly 20% in just the past five days alone. Bitcoin isn't the only cryptocurrency getting hit either. Ripple/XRP, ethereum, stellar, litecoin and numerous other cryptocurrencies have plunged in the past week.

Little tangible news can explain or justify the current crypto carnage. One possible reason is that a pro-crypto member of the Securities and Exchange Commission warned at a conference this week that she's fighting an uphill battle trying to convince the rest of the SEC to approve more bitcoin exchange traded funds.... Nearly two-thirds of money managers surveyed by asset management firm Natixis still thought that cryptocurrencies were a bubble, the firm reported this week.
"In my opinion, bitcoin is dead," wrote the CEO of one wealth management firm with more than $32 billion in assets. It won't go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral. Or there could be a dead cat bounce. Either way, I see bitcoin as a dead man walking. Future generations may read about bitcoin in a finance textbook as a curiosity and wonder what all the fuss was about. There are still some die-hard adherents espousing the virtues of bitcoin, desperate to make a silk purse out of a sow's ear. Unfortunately for them, the end may not be pretty when it comes.

Proponents of bitcoin tend to focus on the impact of the blockchain technology that drives it, and make no mistake, blockchain is the real deal. Blockchain is fundamentally changing the way industries do business, from traditional banking to supply chain management. But just because blockchain technology is creating a new paradigm doesn't mean that bitcoin shares that same distinction.... Most cryptocurrency transactions are purely speculative. There are no real fundamentals to evaluate; bitcoin doesn't produce any products or services, hire any employees or pay any dividends. The only way profits are generated is when the owner is lucky enough to find someone else who will pay more for the thing...

The minute bitcoin or any other cryptocurrency appears to have even the slightest chance of disrupting national monetary supply, I expect regulation to be swift and decisive. The SEC has already issued guidance around cryptocurrencies that has created roadblocks to gaining the same legitimacy as traditional marketable securities... If you enjoy the thrill of making bets, I suggest you visit your favorite sports book or table game in Vegas where your odds of success are much higher.

Comments

£3500 is not dead!

[Anonymous Coward]

Bitcoin will never reach $1000

Now, $3500, is dead. The problem isn't Bitcoin it's people's wild expectations. Well, that and the energy use to make the things.

Re:£3500 is not dead!

[fluffernutter]

Wild expectations, like expecting a method of currency to hold the same value from day to day? Like being able to put $5 in a wallet and knowing you'll be able to afford a coffee and a doughnut next week?

Re:£3500 is not dead!

[Joce640k]

...knowing you'll be able to afford a coffee and a doughnut next week?

And knowing in advance what the "transaction fee" will be.

Oh my

[JustAnotherOldGuy]

No surprise here- currency not tied to anything but mindset is going to be destructively fickle and unstable.

Re:Oh my

[Joce640k]

Little tangible news can explain or justify the current crypto carnage.

Maybe it's just that people are finally starting to realize its true worth, ie. zero.

It's not much use as a currency (unless you enjoy transaction fees and like seeing your money go down in value), it's certainly not an investment.

Sell while you still can!

(oh, wait, you can't... blockchains only allow a few transactions per second so you have to join a long line of sellers)

Re:Oh my

[JaredOfEuropa]

Not this again. Real currencies are not tied to a resource backed standard, but they are closely tied to the economy in which that currency is used. And governments generally know quite well how much extra cash they can print without setting off inflation: if the economy grows, you can grow the money supply as well. Bitcoin isn't tied to any real economy, the volume of BTC transactions is absolutely dwarfed by the speculative transactions. Bitcoin isn't like shares either, which have a speculative nature but always have a real and objective value underpinning them, not a commodity but a company holding assets, adding value and making profit (or with the potential to make future profit)

Re:Oh my

[Joce640k]

The transaction fees are a result of stubborn stupidity by the bitcoin core developers, who insisted they had to keep the block size at a ridiculously small 1MB. That of course created high transaction fees. This is what caused the bitcoin/bitcoin-cash split.

Yes, we know why they exist.

Bitcoin-cash recently did a stress test, showing a far greater number of transactions/second with a 32MB block size.

Very good, but we're not talking about Bitcoin Cash.

Like it or not, plain old Bitcoin is the flagship cryptocurrency. If it goes down it'll take all the others with it.

Re:Oh my

[sacrilicious]

Your post is a breath of fresh air. Not that I necessarily follow it all, but I can tell from the writing that you share my belief that there is a lot more intelligence to be had around analyzing and using crypto-currencies than either "I'm going to get rich on it" or "Because the gonna-get-rich fools are losing their shirts now, it's dead." Jeebus, where's my aspirin?

Honestly, the whole article's got it backwards. I'll believe crypto-currencies are dead when people have stopped using them; and, emphatically, the speculators don't matter to me. And then this quote:

Blockchain is fundamentally changing the way industries do business, from traditional banking to supply chain management

it IS? I've been paying some attention, and have yet to see a single interesting use case where -- aside from crypto-currency for which it's well suited -- blockchain does anything better than the centralized, backed up data repo of whatever corporation or conglomerate is working with data. If someone can point me to something interesting being done, please do tell.

Anyway... thanks again for writing with structure, I dug it.

Re:Oh my

[JaredOfEuropa]

Banks are using blockchain as a settlement mechanism for innovative payment services. But their chief motivation for this use case it to circumvent their own bloated creaking legacy payment processing systems and the months-long development cycles associated with them. So they use it as an innovation platform to develop prototypes quickly. Once they have a good idea if and how to roll out that service to all customers, they will probably integrate it with the legacy systems rather than stick to blockchain (especially something like Ripple which is under external control)

Re:Oh my

[AuMatar]

Name a bank that's actually doing that, and show proof. Not that they're looking into the possibility, but proof they're actually doing it. You won't find any- nobody is actually doing this.

Re:Oh my

[Cyberax]

Nobody uses blockchain for anything serious. Some companies use it because it's a fad and they want to sound cool.

My friend just got laid off from Yet Another Blockchain Startup that was trying to create banking software on top of the blockchains. Turns out that banks don't really need to have immutable history of transactions. Basically there are no situations when it's useful, the regular record-keeping systems are more than enough.

Re:Oh my

[AuMatar]

Yeah, they cap it out at 10K euros? That's not a serious system, that's something they put out there to ride a fad. Call me when they process 10 million euro transactions. You're not showing a serious use of blockchain, you're showing a toy.

It'll always bounce back, and more and more use it

[Anonymous Coward]

A lot more people use bitcoin now than before. Irrespective of the current price, it's still above what it was a good while ago, and each time it falls, it's to a higher level than it was before.

Bitcoin is not going away, no matter what the financial 'oligarchs' would like. A big fat 'Up yours' to them. This article is just more scaremongering to try to drive the price down more. Won't work love.

I remember when

[Anonymous Coward]

No one thought Bitcoin was worth $100. Now its the end when it hits $3000.

No arguments here

[rsilvergun]

They us massive amounts of electricity, they spiked the cost of graphics cards so high that they've only just now come down to the level they were at 2 1/2 years ago and they're completely impractical for purchasing anything except maybe drugs (since they're too volatile and slow for much else). Chalk it up as a failed experiment and move on.

Re:No arguments here

[OzPeter]

Chalk it up as a failed experiment and move on.

Recently (as in the last 4-6 weeks) I have heard ads on AM radio *cough*Beck*cough* spruiking Bitcoin and how it was going to go through the roof by the end of the year, and that you need to order this special report to tell you all about it.

Is there really any difference

[bobstreo]

between buying bitcoin or wall street or penny stocks from an investment point of view?

Both tend to be controlled by rumor, innuendo and flash trading, with the average person left out as anything but a source of income based on payments to provide the services of exchange.

You can of course mine bitcoins, but lacking large amounts of free electricity and computer parts, most of the people I know with bitcoins bought them at some point, some did very well and dumped them for large gains, others just sat on them and are complaining about their current valuation.

As usual, there are people "behind the scenes" making legendary amounts of money in either investment.

Re:Is there really any difference

[vakuona]

Is there really any difference between buying bitcoin or wall street or penny stocks from an investment point of view?

If I buy shares on wall street, or even penny stocks, there is a good chance I will get dividends and make my money back and more that way. People who invested in Apple in 2000 when the whole company was only worth $5bn and kept their shares have received more in dividends and buy backs than they probably paid for those shares initially - Apple has paid out more than $100bn. Yes, you could have made your money by selling the shares as well, but you didn't have to. This is why Apple (and other shares) are investments and not some zero sum speculative activity. You don't need a "greater fool" to make your money with an actual investment.

With Bitcoin, the ONLY way to make a profit is to find someone (a greater fool) to buy it off you for more than you paid for it (by spending I am referring to either by exchanging cash for bitcoins, or by racking up electricity bills mining coins). This is why bitcoin is speculative, and you basically need a "greater fool" to make money off it.

Failed Experiment, or brilliant...

[Anonymous Coward]

SHA256 cracking method?

Someone I talked to claimed that bitcoin has provided an excellent checksum collision database due to the way it works, and that said database reduces the need for brute force when attempting to create collision hashes. I don't know if this is true or not, but as both a social experiment and way to do Folding@Home style distributed crack of sha256sum, it would be a brilliant social hack and experiment all rolled into one.

Re:It'll always bounce back, and more and more use

[fluffernutter]

I traded them in for Beanie Babies a long time ago.

Yes, huge difference

[SuperKendall]

Both tend to be controlled by rumor, innuendo and flash trading

Yes but the difference is, there is a fundamental base of Bitcoin users that will remain.

A penny stock is mostly not about the company, but about the manipulation. Whereas bitcoin is at times manipulated, but still has value.

A penny stock company could shut down any time, but Bitcoin cannot go away from the choice of any one person or even small group of people...

In I way I find it amusing, that you and others proclaim Bitcoin is heavily manipulated - at the same time making no connection with multiple stories of Bitcoin being dead.

I was waiting for a buying opportunity, guess this is as clear a one as any.

Because I'm smart

[PopeRatzo]

Thank goodness I sold all my Bitcoin and put my money in the stock market.

Re:It'll always bounce back, and more and more use

[PopeRatzo]

Bitcoin is not going away, no matter what the financial 'oligarchs' would like

I feel the same way about my Microsoft Zune.

bitcoin is dead?

[themusicgod1]

"Oh yeah, it's totally dead" - 2011

2016 to now ...

[Tjp($)pjT]

GE had a market cap of 280 billion, now around 60 billion. BTC had a market cap around 20 and now is around 60. Lies, damn lies, and statistics. Just because it was trendy enough to go over 300 at some point doesnâ(TM)t mean that was the meaningful data point.

Power consumption is reducing in par with price

[enriquevagu]

The best part (for the environment) is that the overall energy consumption of the Bitcoin network is dropping significantly. According to this estimation the power consumed by the aggregated network has dropped from 73.12 TWh per year (around 8.3 GW on average) one month ago, to 45.54 TWh per year (around 5.2 GW on average) today.

Note that solar panel market installed 98.9 GW last year. With an optimistic efficiency of 50% (nigths, clouds), this means that one month ago we were dedicating one in each 6 new panels installed last year, worldwide, to power Bitcoin. Today, it is "only" one in 9.5.

And yes, those panels are the "clean energy" we are installing to save the world. Bitcoin saves nothing, please save (pun intended) the "but this is the cost for lack of trust/decentralized/...". This is good, and should keep dropping, considering the environmental impact.

Blockchain technology

[Dan East]

the blockchain technology that drives it, and make no mistake, blockchain is the real deal. Blockchain is fundamentally changing the way industries do business, from traditional banking to supply chain management. But just because blockchain technology is creating a new paradigm

Wait, are we talking about the same blockchain?

Though Blockchain has been touted as the answer to everything, a study of 43 solutions advanced in the international development sector has found exactly no evidence of success.

Blockchain Study Finds 0% Success Rate and Vendors Don't Call Back When Asked For Evidence

No value? That's a failure in logic

[Anonymous Coward]

"There are no real fundamentals to evaluate; bitcoin doesn't produce any products or services, hire any employees or pay any dividends. The only way profits are generated is when the owner is lucky enough to find someone else who will pay more for the thing..."

Modern currencies like the US dollar are not backed by anything tangible either. There is also something with Bitcoin and other crypto currencies of value. The most obvious being its ability to enable consumers and businesses to conduct transactions for less and without being in the same place. People are too quick to write off the cost of maintaining a centralized system based around banks and fiat currency. There may be issues with all current crypto currencies, but to ignore the potential and improvements that have already occurred is a great failure in logic. Advances in privacy and anonymity for instance with the zero coin protocol. This is huge for some markets. Dollars exist alongside euros and different crypto currencies can too.

Re:No value? That's a failure in logic

[vakuona]

Modern currencies like the US dollar are not backed by anything tangible either.

This betray a fundamental misunderstanding of what a currency is, and what backs it. Currencies are backed by the economic activity underlying a specific economic area. The US dollar is backed by the economic activity in the USA, the British pound by the UK economy, and so on. Having dollars gives you the right to purchase goods and services from US providers. While the GDP is not "tangible", there is a lot you can buy with dollars.

Also, power consumption is not fundamental

[presidenteloco]

to blockchain and cryptocurrency.

It was only associated with the version 1 blockchain and cryptocurrency technology.

Proof-of-stake and other new concepts will replace the energy-intensive proof-of-work.

I wish people would STFU with this particular criticism of crypto/blockchain because it's like criticising houses because you're opposed to bricks.

The good news...

[Applehu Akbar]

People online will now be able to spell hold correctly again. But they will still think that the oppposite of win is loose.

Taxes and all debts. Get dollars or go to prison

[raymorris]

If you don't get some US dollars and then give them to the IRS, IRS agents will eventually show up at your door and remind you that you better get some soon, or they'll be back to take you to prison. Ask Wesley Snipes - even action movie heroes need to have dollars. It might take a while, but eventually they show up.

That means dollars will always have value, as long as the IRS exists. Dollars keep you out of prison.

Additionally, as a bonus anyone who has debt of any kind needs dollars to get rid of that debt, so that the bank doesn't come take their house, car, etc. "Get some dollars or lose your house" is pretty powerful.

Trying sending the IRS some Bitcoins. Not gonna happen. Check your mortgage statemwnt. It's 100,000 DOLLARS you have to eventually pay the bank to keep your house. Sending them a sha-256 hash isn't going to let you keep your house.

How do we know the bank won't switch to denominating mortgages in Bitcoins or Buttcoins or Anonymous Coward Coin? Because the bank needs fifteen million DOLLARS to pay their taxes. So they are always going to want dollars from their customers.

Blockchain is prefect for doing what it does

[rsilvergun]

and as soon as somebody figures out what that is it's going to take right off. It's a whole new paradigm. Why, that's twice as many digms.

Nope, still dollars

[raymorris]

The text of the much-ballyhooed Arizona bill (that passed) is:

[The tax office may] "develop, adopt and use a payment system that enables the immediate remittance and collection of tax in real time at the point of sale, including payments of additional amounts after audit."

Their was discussion that this immediate payment system could allow one to pay their 800 DOLLARS of taxes though MasterCard, Visa, CoinDesk Discover, PayPal ...

It's still 800 DOLLARS of taxes you have to pay, whether you pay through PayPal or CoinDesk. There wasn't even ever any discussion of anyone getting a tax bill for .03 BTC.

This again

[Artem S. Tashkinov]

Bitcoin has been pronounced dead over 3000 times already yet it costs staggering ~ $3300 at the moment.

Something that has no value whatsoever. Right.

Clearly there's a bias against Bitcoin here at /. but it doesn't invalidate Bitcoin in the slightest. Yes, a year ago it was hyped like crazy, rose like crazy and then subsided but it's still very much alive and kicking.

Shitcoins meanwhile have lost a lot more than Bitcoin because most of them are nothing but shit - "breakthroughs in using blockchain" which solve imaginary problems using imaginary tools. See how Ethereum has lost a lot more than Bitcoin because it's been used as a platform for hundreds of worthless ICOs.