Is Crypto Dead?

Blockchain, Technology, Smart, Bitcoin, Money

For crypto speculators, newbies, and “get rich quick” thrillseekers, last week was tough. The Chinese government re-signaled its displeasure with bitcoin and all things crypto, the IRS announced it is going to do what it can to tax every possible crypto transaction, and Elon tweeted, scaring the hell out of people who pay attention to him. Panic ensued. When it was over, Wednesday’s crypto crash vaporized about $1 trillion of market value.

The currency may be virtual, but for those who sold at a loss, the losses were real. And while the market came back a bit after the crash, this rollercoaster ride is getting even more extreme. Which is why it is no surprise that so many well-respected businesspeople and financial experts chose this past week to declare that crypto is “valueless,” or “nutso,” or “dead.” But think about this…

Was the internet valueless because the dot-com bubble burst?

Almost $8 trillion of wealth vaporized when the dot-com bubble burst in 2000. If you remember, there were companies on the NASDAQ with billion-dollar market caps that not only were not profitable but had no chance of ever being profitable. These financially engineered valuations were, in fact, fictitious. But that didn’t stop speculators, newbies, and “get rich quick” thrillseekers from taking the NASDAQ up over 5,000 in March 2000, and by January 2001 it was just under 2,300. It didn’t matter who you were or what your startup was about; by Q2 2000 you could not raise a dime if you even mentioned the idea of a “dot-com.”

But what did any of Wall Street’s insanity or the motivations of the professional wealth-creators on Sand Hill Road have to do with the value of the internet? No one would invest in a company that leveraged it. Did that mean the internet was dead? Was it valueless? Look around you today. Everything and everyone is connected to the internet. We could not function without it. And yet, just 20 years ago, no one would invest a dime into it.

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William K. 3 weeks ago Member's comment

And an interesting opinion indeed. And certainly correct as far as I see. Gambling on some stocks is a lot like gambling on that roulette wheel. Possibly winning, probably not winning. I might wager but it is never a gamble, because I know the answer. Those are the folks who get rich, very seldom quickly, though.

Marcy Brown 3 weeks ago Member's comment

This looks to me a mean article. How? If I understood correctly, it says that (speculators, newbies, and quick rich seekers) have been used as Guinea pigs to try the v1 of crypto on them. This v1 will be used to enhance & release v2 which are the governments' own digital currencies. Those newbies have been cheated on and their investments vaporized! Please correct me if I am wrong!