Crypto Meltdown Erases More Than $1 Trillion in Market Value

[Nevilledog]

Link to tweet

https://www.bloomberg.com/news/articles/2022-01-21/crypto-meltdown-erases-more-than-1-trillion-in-market-value?srnd=premium

No paywall
https://archive.fo/wTBcK

For Bitcoin, there’s only been one constant recently: decline after decline after decline. And the superlatives have piled up really quickly.

With the Federal Reserve intending to withdraw stimulus from the market, riskier assets the world over have suffered. Bitcoin, the largest digital asset, lost as much as 8.7% Friday and dropped below $38,000 to its lowest level in six months. Since its peak in November, it has lost 40% of its value. Other digital currencies have suffered just as much, if not more, with Ether and meme coins mired in similar drawdowns.

Bitcoin’s decline since that November high has wiped out more than $570 billion in market value, and roughly $1.17 trillion has been lost from the aggregate crypto market. While there have been much larger percentage drawdowns for both Bitcoin and the aggregate market, this marks the second-largest ever decline in dollar terms for both, according to Bespoke Investment Group.

“It gives an idea of the scale of value destruction that percentage declines can mask,” wrote Bespoke analysts in a note. “Crypto is, of course, vulnerable to these sorts of selloffs given its naturally higher volatility historically, but given how large market caps have gotten, the volatility is worth thinking about both in raw dollar terms as well as in percentage terms.”

*snip*

[dawg]

1. I guess I'm gonna have to put off the Lambo for another year.

[ColinC]

2. I anticipate a year or two before the next crazy bull runs.

For instance I think dogecoin will make it to 2 or 3 bucks. But probably not before it revisits a nickel.

[D_Master81]

9. Agree with timeframe

I agree with the timeframe of at least 6-12 months, depending on Fed policy. But I can’t ever see Doge reaching those levels. It produces 14 million new coins every day. In 2 years it would have to have a market cap 10 billion higher than now to have the same price. For a $2 Doge it’s market cap would need to be north of $250 billion.

[ColinC]

10. Cryptos are entirely hype based with no real practical use.

Things like market cap, volume, etc are virtually meaningless when the only determination is how many people buy and sell at various times. There is really no inherent value in the "coins" or "tokens" so the overall market caps and so on cannot be compared to market caps with actual utility.The next big run will be just as short and quick as the last, but the size will be depending on the things you mentioned.

[jmowreader]

12. Come now. There are LOTS of practical uses for cryptos

You can:

buy illegal drugs on the Dark Web
pay for a contract killing
pay off a ransomware terrorist so he gives you your computer back
pay off a ransomware terrorist and he won't give it back to you anyway
buy an illegal machine gun

and...

pay the Proud Boys and Oath Keepers to invade the US Capitol during the electoral-vote certification

Strangely enough, they don't seem to be good for much of anything else. I'd say they're the baseball cards of our time, except that when the bottom drops out of the baseball card market you can still have fun looking at the cards.

[ColinC]

17. Pretty much.

I did well with my cryptos and got myself some nice things but If I didn't sell when I did, I wouldn't have done nearly as well.

[empedocles]

15. Practical criminal uses

With Criminal Use of Cryptocurrency on the Rise, Senator Hassan Calls for Action from Federal Agencies


https://www.hassan.senate.gov/news/press-releases/with-criminal-use-of-cryptocurrency-on-the-rise-senator-hassan-calls-for-action-from-federal-agencies

[lagomorph777]

21. +1000 Digital Ponzi scheme

[Haggard Celine]

8. Yeah, I'm going to have to change my plans to buy that house in Malibu.

I might have to buy something a little smaller.

[Shermann]

3. Hmm I haven't heard from "That Guy" at the office who's into crypto lately

"That Guy" seems to be everywhere when crypto is on a tear.

[lame54]

4. Now you see it, now you don't...

Actual we never could see it

[panader0]

5. I can't claim to know much about Bit Coin but it seems kinda like a pyramid scheme to me.

[ret5hd]

13. Well, are you interested in being your own boss...

and making money by just talking to your friends and family?

If bitcoin isn’t your thing, I bet I’ve got just the deal for you!

[panader0]

16. I'm retired, but I was a contractor for my career, first in masonry, then a general.

I've always been my own boss.

[CloudWatcher]

6. What's not to love?

Crypto techs are enablers of innumerable scams and extortions, ridiculously unstable and the coin mining seriously contributes to global warming. What's not to love? Ban the damn things.

[orwell]

7. Tulipmania...

...part deux.

[jmowreader]

14. How many times do I have to tell you?

You can plant tulip bulbs.
You can't do anything with bitcoins.

[orwell]

33. Okay that's funny...

...I like the story of the dock worker who mistakenly sliced up a tulip bulb during the mania unaware of it's value and proceeded to eat it. He thought it was some type of onion.

He basically put the equivalent of a modest house on his sandwhich.

Whoops...

I think this story came from a book called "Extraordinary Popular Delusions and The Madness of Crowds" by Charles MacKay.

[lagomorph777]

11. Wow, what a surprise. Some here at DU have been telling us to invest in this garbage.

Some of us have seen Ponzi schemes before.

[ProfessorGAC]

19. Seems To Fit The Profile

No matter what happens those that started up the venture make money no matter what.
The farther one gets from the origin the greater the risk of loss.
Fits a description of a pyramid scam, too.

[ColinC]

23. I did well off it, but it is gambling.

"investing" Is definitely not the right word when investing in garbage that can sometimes be worth a lot of money, and suddenly be worth nothing.

[Jirel]

18. Bwahahahahahahahahahahahahahaha!!!

OMG. I had to catch my breath.

Bwahahahahahahahahahahahahahaha!!!

No, seriously. People who gamble on play-money shouldn't be surprised when it's not worth the bytes it's stored on.

[qazplm135]

20. I bought about 800 bucks worth of

various cryptos for fun. It went up to around 1200 and now back down to around 800.

Definitely tough to imagine doing it in any amount I actually was worried about losing.

[ColinC]

22. I got super lucky off of cryptos

Bought 500, turned into 20k at one point, cashed out and spent it on things. Glad I did.

[qazplm135]

24. I got 88K bonus back in 2010

if current self could talk to past self now...lol

[madville]

31. I bought $200 worth

And my account is $540 now, converted it to Tether awhile back which stays right around $1 each so at least I’m not losing anything at the moment. I was just playing around, if it goes lower may buy back in at some point. Was really just seeing how it worked out of curiosity.

A guy at work put $1000 in some coin last year and cashed out at $80k. After taxes he bought his wife a new SUV, smart move maybe converting it to something real at the time.

[Hekate]

25. Yowza. Want a bouquet of Tulips?

I prefer my savings in an FDIC insured account, thank you very much. But then, I’m risk-averse and always have been.

[DFW]

26. This has been a down week for crypto and stocks, but not precious metals

Gold, silver, platinum and palladium are all slightly up for the week, though off their highs.

Even Warren Buffet's flagship Berkshire Hathaway went down $30,000 a share, and Tesla is back below $1000. I never followed Tesla until a well-off friend in Dallas let on this week that he had bought 15000 shares of Tesla some years ago, when it was at $31 a share, and he never sold them. At 30 times his original $450,000 investment, I guess no tears need be shed for him.

While I get the purpose of bitcoin (I think), I never got the mechanics behind it, and watch it with all the interest of a Monopoly game.

[miyazaki]

27. Fortune favors the brave.

[struggle4progress]

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[Xolodno]

29. Just wait.

Once the Fed jacks up interest rates and gets inflation under control, people will start screaming to buy gold. The exact opposite of what you should do once inflation is back under control.

[muriel_volestrangler]

30. The Stupid Money is now in NFTs: Student becomes millionaire by turning selfies into NFTs for a joke

A student in Indonesia has made a fortune after turning a collection of selfies into non-fungible tokens (NFTs) because he thought “it might be funny”.

Sultan Gustaf Al Ghozali, who studies computer science, took nearly 1,000 pictures of himself sitting in front of his computer over a four-year period, before transforming them into NFTs – unique digital items that are bought, sold and stored on a blockchain.
...
“I never thought anybody would want to buy the selfies, which is why I only priced them at $3.”

His selfies are now selling for up to 4 ETH ($12,500) apiece, with the entire collection, named Ghozali Everyday, valued at around 374 ETH ($1.2 million).

https://www.independent.co.uk/life-style/gadgets-and-tech/nft-cryptocurrency-selfie-crypto-b1996276.html

[Baked Potato]

32. Sell now! The loss deduction will be fabulous!

The one called Ether is especially laughable… poof!

[smirkymonkey]

34. Gee, who ever could have seen that coming?