Of the seven biggest, six have plunged by 78% to 92%.
Cryptocurrencies and tokens are multiplying like rabbits: There are now
1,926 listed on CoinMarketCap.com, 500 more than early 2018. And even as the
number of cryptos continues to swell, each crypto constantly creates new
units through “mining.” This dilution and hyperinflation is worse than with
all but the worst fiat currencies, such as the Venezuelan bolivar.
Cryptos are “decentralized.” That was one of the major selling points in
whitepapers full of intelligent-sounding gobbledygook and other propaganda
promoted in myriad ways, including by an army of crypto trolls and
celebrities paid by the tweet. Because cryptos are decentralized, everyone
can create their own, and all kinds of outfits are mining new units of
existing cryptos. It’s really just a big joke. But people are losing large
amounts usually expressed in their hated fiat currency. The pain is real. And
the numbers are big.
At the peak on January 7, total market cap was $704 billion, per
CoinMarketCap at the time.
But new cryptos arrive all the time, and cryptos are also multiplying
themselves via the mining process. CoinMarketCap figures the market cap going
backwards, based on today’s existing cryptos to arrive at a theoretical
market cap at a date in the past, as if all those new cryptos and tokens had
already existed on that day in the past. And by this measure, the theoretical
market cap for January 7 was $830 billion.
Based on this measure, the aggregate market cap has plunged 77%, from $830
billion to $192 billion in eight months. $638 billion vanished or transferred
to those who sold in time from those who didn’t.
The good thing for the US economy is that much of this market cap
destruction has hit people around the globe, and people in the US got whacked
by only a portion of it.
On December 11, I asked: “Peak Bitcoin Media-Mania Yet? In Ten Practically Funny
Pictures, because the MSM was fanning with all its might the bitcoin
mania. Looking back, my screenshots of front pages are amusing. Those were
heady times! But I missed my target. I was six days early. The bitcoin peak
wasn’t until December 17.
Of the top seven cryptos by today’s market cap, six have collapsed by
between 78% and 92% from their respective peaks. Several of them are where
they were a year ago or 15 months ago. Of the top seven, only Bitcoin plunged
less than 78%.
Bitcoin is down 68% from its peak, and is back where it
was on October 31, 2017 (all charts via CoinMarketCap.com, red and blue marks mine):
Ethereum collapsed 86% from its peak and is back where it
was over 15 months ago, on May 29, 2017:
Ripple XRP has collapsed by 92% from its peak on January
4, 2018, and is back where it had been over 15 months ago. That 1,1140% spike
didn’t last long. It boggles my mind why not everyone sold during and after
that spike. And why did anyone buy? What were they thinking? That
this would continue? Note how nearly impossible it is now to unload a major
position because volume (grey columns in the chart) has died down, and trying
to dump a load is going to cause the price to collapse further.
Bitcoin Cash was going to be the new thingy. It was split
off from Bitcoin in August 2017. Over the two days from November 11 to 12, it
quadrupled, a phenomenon
I observed with a lot of headshaking, to $2,448. By December 20, it shot
to $4,300. Now it has collapsed 89% from the peak to $469, below the price
where it had started out ($556).
EOS is another late-comer. It kicked off in July 2017
with what became the biggest ICO at the time. It did a beautiful double spike
peaking at $21.45 on April 28. In the four months since then, it has
collapsed 78% and is back where it had been on December 7:
Stellar shot up in six weeks from about 3 cents to 86
cents by January 3, 2018, and has since collapsed 78% to 19 cents:
Litecoin peaked on December 18, 2017, at $353 and has now
plunged 85%. Its founder admitted on December 20 that he’d wisely dumped his
entire stake, using the full force of the first-mover advantage. True
Believers were left holding the bag:
Of the nearly 2,000 cryptos, there are many that have become worthless and
trading volume in them has died down. Even among the larger ones, there are
plenty that have plunged 90% or more. In other words, most of that wealth has
already vanished or was transferred to sellers who took that hated fiat money
and laughed all the way to the hated bank. What remains is a mop-up operation
that may drag out for a while, kept alive by some exciting but fleeting
moments of hope.
Back to fiat money. Read… The
Fed’s QE Unwind Hits $250 Billion
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