This is not like the dotcom crash – though it’s even more brutal.
By Wolf Richter of WOLF STREET
Cryptos are having another bad-hair day, one in many, with just about all the largest ones crashing 12% to 25% this morning.
It’s crypto mayhem for those who’re watching their wealth evaporate, after having gleefully watched it balloon in multiples of 10 or 100 in a matter of weeks and who expected to be billionaires by year-end. At the time, which was just a few weeks ago, they’d touted whitepapers full of intelligent-sounding gobbledygook as to why these price surges were based on fundamentals, and how these cryptocurrencies would change the world.
By now, there are a gazillion of these cryptos. Anyone can issue new tokens. According to coinmarketcap.com, there are now 1,513 of them out there, about 100 more than last time I pooh-poohed them on January 17. They multiply like rabbits, and as long as there’s anyone out there still silly enough to put real money into them, the issuers of these new tokens are going to get rich. The reason why there are scams is because scams work.
Total market capitalization, according to coinmarketcap.com, is now at $335 billion. This is down by 52%, or by $372 billion, in just one month from the peak on January 4, an era when market cap was headed to $2 trillion by the end of 2018, and when RBC Capital Markets prophesied it would reach $10 trillion over the “longer term”…