Crypto collapse erases more than $1 trillion in wealth, forcing a reckoning for everyday investors

[Yo_Mama_Been_Loggin]

By the end of last year, the value of Hasten Carter’s cryptocurrency holdings had climbed to about $250,000. He moved to a nicer apartment, bought a new truck, and started thinking about pursuing his dream of a full-time career in game development.

But over the past two months, the value of cryptocurrencies has plummeted, taking with it much of Carter’s digital nest egg, a mix of Ethereum, the second-most popular cryptocurrency, and a number of more obscure coins.

“It’s gotten out of hand to the point where I’m not sure I’m comfortable I can keep my money,” said Carter, 30, who has kept his day job at a Nashville sign-making business. Of his hopes for a new career, he said: “I’m not sure if it’s as wise of a decision.”

Thousands of Americans who jumped into crypto investing over the past two years in hopes of a rocket ride to instant wealth now face a similar reckoning: Prices for cryptocurrencies — from relative stalwarts such as bitcoin and Ethereum to more exotic tokens — have cratered since reaching all-time highs in early November, wiping out an astonishing $1.35 trillion in value globally, nearly half of the total market, according to CoinMarketCap.

https://www.washingtonpost.com/business/2022/01/25/crypto-collapse-regulations/

Today's tulip mania.

[orwell]

1. If crypto is such a "revolutionary" new "currency"...

...why does it so closely follow the stock market?

This whole thing is a laughable bubble. But bubbles can go on for decades.

It certainly isn't a viable medium of exchange or a sovereign currency.

Many of the proof of work coins use vast amounts of energy. So not only are they highly volatile they are harmful to the environment as they use energy that could be generated for productive enterprise. (Should we run a chip fab or use a bunch of energy to make a digital coin that nobody really needs...) At least proof of stake coins are energy efficient useless speculative instruments.

It is far to volatile to be used for ordinary transactions.

If you want to trade it, then fine. It's same as trading stocks, commodities, bonds, or currencies.

At least a stock certificate is ownership in a productive enterprise.

[LiberatedUSA]

2. It is hot potato.

You cash out and make off well, but that means a sucker just replaced you. It is a game of hot potato.

And Bannon wants you to buy his so you can’t cash out until he does (means too late for you).

[KentuckyWoman]

3. I am probably too stupid to understand "crypto"

Seems to me anything they advertise on the TV in the same segment with the My Pillow and Bradford Exchange is probably not an "investment".

This said, Crypto does seem to be more effective as a cross border currency than anything else to date. Or am I wrong on that?

[DFW]

10. From what I understand, it is effective as an untraceable cross-border currency

If you don't mind declaring a transaction, go to your bank, pay $10, and you can wire any amount of money you want (you gotta have it first, granted, but I think that applies to crypto as well) to any place you want. You don't even have to report it yourself. The bank will do that automatically anyway. When it's tax time in Germany, I just wire money from my US account to my German account, and it's there the next day.

I am too stupid to understand crypto, too, and it can't be an age thing because a friend of mine in Holland who will be 76 this year speculates with it all the time. After this past week, I think he might be tempted to cross back into this world for a change, but maybe he's so hooked, he'll just spend the rest of his compos mentis days trying to recoup his losses.

[RandiFan1290]

15. "Crypto does seem to be more effective as a cross border currency than anything else to date."

There is a company in San Francisco named 'Ripple' working on that right now.

[Disaffected]

4. "Crypto collapse erases more than $1 trillion in wealth..."

Actually it did not as the "wealth" never existed in the first place. It was purely illusionary.

[RandiFan1290]

16. I just tried to spend some of my profits

and they said my money was fake



Can the devs do something??

[Progressive Jones]

5. Crypto Is A Con. I'm genetically incapable of falling for it. nt

[Jacson6]

6. A fool and his money soon part.

[hunter]

7. Remember Beanie Babies were selling for crazy prices?

It's like that, but a crypto-currencies are just a bunch of cute numbers in a computer network you can't hold in your hand.

Hard currencies are something else. These are based on the powers of a government to tax people, enforce contracts, and regulate debt.

[vercetti2021]

8. Scam

Just saying this is all a big fat scam. NFT's, crypto. You name it. It's a fools gamble

[Deminpenn]

11. The New Yorker recently did a story on a guy who

threw away the drive containing his bitcoin key. It has the best explanation I've heard or read on what bitcoin is and how it operates.

https://www.newyorker.com/magazine/2021/12/13/half-a-billion-in-bitcoin-lost-in-the-dump

The Bitcoin system, which operated by linking individual computers together to form a vast, secure network, appealed to him immediately. It reminded him of two applications he’d liked: Napster, the rogue service for sharing music files, and SETI@home, which allowed users to combine the power of their computers to search for extraterrestrial life. Howells downloaded free software that made it possible to acquire bitcoin. He would lend his computer’s processing capabilities to help the Bitcoin system create a permanent record of network transactions, and, in return, the program would let him keep some currency. A private key—a unique chain of sixty-four numbers and letters—granted him exclusive access to his bitcoin stash. He soon set his gaming laptop to spend the overnight hours “mining bitcoin,” as the process came to be called.

There is also a finite supply of bitcoin so that as more of that finite supply is "mined", the more expensive it is (need more computing power) to get just one bitcoin. At some point, the marginal cost of the next bitcoin will exceed the marginal value of that bitcoin. From that point on, you are losing money. Then what? Bitcoin is not a currency backed by a government nor is it legal tender. Of course, anything can used to buy things if the seller will accept it. (During The Depression, there were stories about people paying with chickens, etc, because they did not have money.)

[panader0]

12. Where did it go? If that money had been actual physical currency, instead of some cloud currency,

it would still exist somewhere. When a bank is robbed, they lose the money, but it still exists, just
in the hands of someone else. That's what I don't get about crypto stuff, it exists by faith only. I just
can't keep myself from believing that's it's a pyramid scheme of a sort.

[RandiFan1290]

13. Oh NOES!!111

Bitcoin is dead again?

[Buckeyeblue]

14. The only people who made money are those who cashed out

[Buns_of_Fire]

17. Does this mean that my Non-fungible Token of a digital painting

of a kitten taking a digital photograph of George Washington signing the first Official Authentic Certificate of Authenticity isn't really worth the 14 Billion VaporBuck$ (tm) I paid for it?

I'm ROONED!!!