Bitcoin drops below $20,000 as crypto meltdown continues

[Recursion]

Source: CNN

The price of bitcoin breached $19,000 and ethereum fell below $1,000 Saturday morning, extending the brutal crypto bear market to new lows.

Bitcoin plunged nearly 10% in less than 24 hours, adding to a series of sustained losses over the last several months. It now sits below $20,000 for the first time since November 2020, down more than 70% from an all-time high of $68,000 per coin in November 2021. B itcoin has lost $900 billion in value since that peak.

...

This week, the Federal Reserve increased interest rates by 75 basis points, the largest hike since 1994. The change led to a retreat from all assets. The S&P 500 is also in a bear market and posted its worst week on record since 2020.

The crypto world is reeling from the $60 billion collapse last month of two other major tokens, Terra-Luna and Celsius. Those losses have increased doubts about the general stability of digital currency.

Read more: https://www.cnn.com/2022/06/18/investing/bitcoin-ether-cyrpto-drop/index.html

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Please pardon my Schadenfreude

[Journeyman]

1. "Those losses have increased doubts about the general stability of digital currency." . . .

As though bitcoin itself weren't enough to foster doubts.

[Ocelot II]

2. I still don't really know what crypto is, and I'd never buy something

I don't understand. But I've even been hearing radio ads about buying crypto for your IRA, which strikes me as monumentally stupid. I suspect a lot of people bought into it without knowing what it was. At least you can have a nice garden if you've bought too many expensive tulip bulbs, but crypto is likely to leave you with bupkes.

[cstanleytech]

5. It's a virtual currency who's value is determined by the faith

of people but then so are all currencies.
If people no longer believe in it then it will crash and burn.

[Kashkakat v.2.0]

9. Its like the tulip craze of the 1600s all

over again. At least back then you got some nice tulips out of the deal - something tangible.

[cstanleytech]

11. "something tangible" Depends on if "our" the universe is real or if its some sort of simulation.

If its a simulation hopefully someone in the "real" world will kick the fucking ass (assuming they have ones) of said programmers along with breaking a few their limbs..................repeatedly.

[hunter]

12. That's just not true.

The value of actual currencies like the dollar are based on the government's ability to collect taxes, regulate markets, and enforce contracts (defining what sort of contacts are lawful, and which are not...), among other things.

That's not "faith." Nations with so-called "hard" currencies do these things very well and with great consistency. Nations with softer currencies don't.

Cryptocurrencies have none of that backing.

[Effete Snob]

3. .

[mockmonkey]

6. That made me think of Derek and Clive

Dudley Moore and Peter Cook actually, or the other way around?

[PSPS]

4. OMG!!1! Stop the presses!!1!1 A pyramid scheme is in meltdown!!!111!!! OMG!!11!

[RussBLib]

7. was just at $18,197

no skin off my nose

I've suffered enough losses in the markets as is.

[William Seger]

8. $17,663 -- no bottom in sight (nt)

[Lucky Luciano]

10. Margin Call gentleman! LOL

[IronLionZion]

13. "doubts about the general stability of digital currency"

Somebody thinks there's stability in digital currency?

Here's how traditional currency is valued: https://corporatefinanceinstitute.com/resources/knowledge/economics/how-is-currency-valued/

Summary:
Currency value is determined by aggregate supply and demand.
Supply and demand are influenced by a number of factors, including interest rates, inflation, capital flow, and money supply.
The most common method to value currency is through exchange rates. The two main exchange rate systems are fixed rate and floating rate systems.

How do people value digital currency?

[reACTIONary]

14. Digital currency is too broad a term....

bitcoin, et.al. is not just "digital currency", it is decentralized and basically unregulated digital currency. Digital currency that is issued and centrally controlled by a legitimate authority, that is, a government, would not have such problems. Or at least not to any greater extent than any other such currency.

[Aussie105]

15. It was never real money.

It's value depended entirely on those who wanted to exchange real money for crypto, thinking they were going to turn a profit.

Sorry for your loss, gamblers.

My crypto stash hasn't changed in value. Still $0.

[brush]

17. Agreed. It's always been a crap shoot, what with the volatility...

and the many, sudden abscondings and disappearances of funds, never to be seen again.

I'll stick with greenbacks.

[Deminpenn]

16. Heard an astute comment yesterday from

a business or market analyst on CNN, iirc. He said what this crash shows is that the cryptocurrencies aren't independent of each other as their marketers claim because not only are the cryptos themselves crashing but so are the companies that trade and sell them. Maybe crypto isn't a traditional Ponzi scheme, but it sure looks similar.

[Peachhead22]

18. Greater fool theory meets MLMs

The only way to make money from crypto is to convince someone dumber than you to buy your crypto. That's why you see so many crypto owners evangelizing for crypto and telling people to "hodl" [sic] onto their crypto. They're not hoping for you to get rich. They're trying to leave others holding the bag.

And it's unregulated. So pump and dump schemes are common and totally legal.