Crypto’s $600B Crash Hits a New Low
bloomberg.com
bloomberg.com
At a party dude was telling everyone to invest in btc because it is the future, and it was $14k at the time. I explained that it is very risky and volatile and dude would just ignore whatever I was saying, even though I mined many cryptos, bought btc for 1 penny and had a better understanding of tech than him. 3-4 months later crypto was back to $6k and he never mentions it again with me around lol.
The point is many crypto businesses screwed people over (MtGox). Many people lost fortunes from private wallets due to malware, forgetting pw.
If I pay with a credit card I have level of protection. When I put my money in a bank the money is insured. Crypto is simply too risky as a way of storing money and trading.
Token price speculation (aka "crypto investing") is much more about marketing than it is about technology. This is why you see cult-like marketing attempts.
Another aspect, gambling (because most of it [trading] is gambling) can have immense distortion power over your brain. When you have money and high frequency random noise .. you're in for a nice emotional rollercoaster.
Is not pure marketing.
With BTC, you could buy in at almost any amount, get out whenever you wanted, and transfer fees were pretty low. Those aren't common traits for most other investment vehicles.
It's kind of a side effect of so much capital being locked up in a smaller and smaller percentage of the population. The folks closer to the bottom are clawing at anything that might improve their situation a little, even if it comes with a lot of risk.
Index funds/ETFs allow anyone to invest in the stock market starting with small amounts of money.
It's possible to win big at negative sum games, but by definition not everyone can.
Some people got very lucky. Some people lost their life savings.
In the stock market with diversified investments, even if the market crashes, historically you would have always recovered and then some within not very many years so long as you didn't do the stupid thing and panic and sell during the crash in an attempt to time the market.
Same with Bitcoin. There is no difference between the all-time SP500 chart and the all-time BTC price chart. In both cases, historically anyone who holds long enough ("within not very many years") eventually makes money:
• https://dividendtotalreturn.net/wp-content/uploads/2017/08/C...
• http://bitcoin.zorinaq.com/price/
I'm not saying people should dump their savings into BTC, just that your argument isn't a good argument to defend the SP500. An SP500 index fund is great for other reasons, namely: it has a great track record and you can't really go wrong with investing in ~500 of the biggest American companies.
It's also amazing how small investment fees can become.
Unless they forego their employee contribution to the RSP, they have very little flexibility.
But not everyone can do a triple flip with a half twist while navigating the financial system.
i.e. I think I reworded my original comment in reverse.
Although I'd like to point out that bitcoin is now a rather small fraction of the whole spectrum of crypto economy.
Bitcoin as a main-stream pioneer served its purpose well, and now the focus is actually to provide equal-quality infrastructure for crypto to become a meaningful candidate for future economy.
That prospect certainly does not warrant the hype and money currently in the area on a case-by-case basis. But any such large-scale changes have to have a phase of rampant lock-in of wealth from general public so the society as a whole commit to support the development of the technology for some minimal amount of time.
I actually no longer regret my negligence to bitcoin, which for anytime between 2009 and 2014 can help me make a fortune from complete financial freedom to a year of income, now I see the society have committed a good amount of resources; and a substantial fraction of people are aware of the concept. It's not the time for engineers to start work hard and build the actual infrastructure.
That hopefully can deliver the actual value!
What? It's over 50% of total crypto market cap. And a huge chunk of the altcoins are barely liquid.
I do of course agree with your overall conclusion - Bitcoin is still the most dominant, it just doesn't have the majority of market cap (since late 2017)
Sure, if you're calculating market share using the metric "how many crypto coins exist?", which makes no sense.
Scroll to the botttom for the chart:
For example, California is now minority-white, in that “white” is the reported ethnicity of less than 50% of the population, despite being still the largest sub-population.
>Although I'd like to point out that bitcoin is now a rather small fraction of the whole spectrum of crypto economy
So really, a "rather small fraction"? c'mon.
What crypto hype train? Most crypto, such as AES, RSA, Mersenne Twister and the SHA series of hashing algorithms were very carefully designed and vetted over a long period by professionals. There's not much hype there, just solid technology. That cryptocurrency thing seems to attract scam artists like moths to a flame, though.
> The point is many crypto businesses screwed people over
Like RSA making the backdoored Dual_EC_DRBG the default RNG in BSafe?
Neither cryptocurrencies nor cryptography are, by definition, the only crypto.
What does that have to do with the SEC postponing its decision on whether to approve VanEck's ETF backed by Bitcoin, specifically?
This article is about a specific ETF. How many people upvoting the parent comment understand that, say, the Winklevoss ETF was set to 0.01 BTC per share, whereas VanEck set each share at 25 BTC (which is something special); let alone the implications of such a difference?
I think it's been established on HN that Bitcoin = bad, we don't need to regurgitate the point on every thread about it. I come here for nuanced discussion, if I wanted black and white thinking I'd be reading plebbit.
A good point made on /r/bitcoin was that the SEC has access to the DOJ, even if through unofficial channels. The price manipulation inquiries have yet to be resolved. If the SEC gives the go ahead, and the DOJ inquiry results in negative price action, those who invested in the ETF, which likely includes institutional investors, take it square in the mouth after assuming all was safe due to the SEC action.
Critical to the SEC's decision is investor access to the products, so that less knowledgeable investors are protected from unsound investments.
A higher share price restricts access to wealthier investors, the type that meet the SEC’s requirements for accredited investors.
That is just one difference between this ETF and the Winklevoss one, you were unaware of it (and the implications) but still regarded VanEck as not "special," further highlighting how pointless generic "Bitcoin = bad" comments are on threads about specific topics.
No, I'm implicitly agreeing with the HN community: comments that are considered valuable are voted up, without any need for relevancy police.
I don't believe you're naive enough to believe this is the whole truth.
If you are, take a look at this thread, where the parent comment (that you compared to other irrelevant comments) is the most upvoted.
The question is if you’re sophisticated or lucky enough to ride the variance on an upward direction.
Just out of curiosity, what makes you think that insured transactions to verified parties will not occur at some point? Credit cards have evolved substantially from the days of paper imprints themselves.
As always, the reality is not as black and white as you present it. Credit cards and fiat money certainly have advantages but they also have many drawbacks. Just to name a few: credit card fraud eats into merchants' profits, international money transfers are slow and crippled with high fees, bank accounts or cash can be frozen or seized by authoritarian governments, hyperinflation destroys savings, etc.
There are use cases where crypto adequately solves some of these problems that neither credit cards nor fiat money can solve. And, yes, crypto comes with a different set of drawbacks but that doesn't mean crypto is "too risky" for anyone to do anything with it.
People actually realize that an anonymous, autonomous & decentralized system is not always desirable.
And when its not risky the price will be higher because so many other people will be storing and trading it safely.
Thats the real bet.
If it fits your risk profile then you have it, and probably have had it since 2012 because the fundamentals were the same then as they are now. If you weathered the risk back then you'll weather it now where its a lot less risk.
And if today's lack of risk still doesn't fit your risk profile, then you have to wait. Simple.
Yes, and it includes those that peddle professional services i.e. lawyers and accountants. Those are the people who add the veneer of legitimacy to this pyramid scheme. These are the people that need to get their hands slapped.
The really funny part is that the same firms would never touch penny stocks, pink sheets or sellers of unregistered securities because that's "dirty". Cryptocoins on the other hand, absolutely! They are all over it.
If you have the efficient frontier model in mind, then you should know you shouldn't put too much money into it because the volatility of it is insane. My small early bets in Bitcoin and Ethereum worked out because the volatility turned out to work in my favor. But if they did go to zero it wouldn't have mattered much anyway. There're still other non-crypto stuff (e.g. tech stocks, ETFs) I invest into.
There're known ways to make risky investments work in a portfolio in the finance world - or else VCs wouldn't exist, coz nobody would give money to a VC to begin with. It's also a fact that most in the general public don't know about it. As a result, many public investors would see a Bitcoin as the same as a share in Google or Facebook - something to put money in. While in fact the attitude you take for each of these should be very different.
This would actually quickly lead to questions like how to protect public investors. Sure when Bitcoin drops or a startup fails everyone would be angry and people's instinct is to ban it, or at least make it available only to sophisticated investors. But then when things go well people would complain that only the VCs and hedge funds have access to the best investment options. I think the solution to this all is really investor education (modern portfolio theory isn't super complicated math) and better transparency. The latter can be done with better regulations of exchanges and ICO issuers. But the former has a long way to go.
#ThisIsNotInvestingAdvice
Congratulations on becoming an accredited investor.
Disclaimer: I own a portion of about 100 YC companies. And some crypto.
If you don't have hedges to insure against those risks, you are still essentially gambling with your principal. Even a Series A/B Ycombinator company probably has a double-digit percentage failure rate.
Also I agree with everything you said.
Despite what I see as it's massive potential for things like micro-transactions, global remittance, arbitrage across exchanges, a development platform for payments and functioning as an actual currency (i.e. a medium of exchange, what you send is exactly what the other person gets) -- the market does not reflect this reality at all right now. There are several projects that are objectively scams with higher market caps than Nano.
To me this reflects that the market is completely irrational right now. I knew as early as January that there was going to be a reckoning, but until some of these coins and tokens that are going nowhere are shaken out projects will just have to stand on their own merits and prove that they're valuable.
[1]: https://nano.org/en
At this point you are just saying anything that comes to mind and is negative without putting in thought.
How?
If you're unaware of that concept as a user but a fiat "off-ramp" exists (a way to turn your Nano into your local currency) you can immediately "cash out" whenever you receive a transaction.
If you're dealing with micro-transactions or payments in general then we're beginning to wade into the territory of imaging a secondary "off-chain" system of accounting and many strategies likely apply.
So possibly this crash, in addition to the SEC refusal to let a Bitcoin ETF trade, is also affected by the recent tariffs and the Yuan devaluation...?
The people that have been around for almost a decade have treated Bitcoin as a hedge against Fiat currency inflation. Similar to how people treat gold. I am one of these people that believe in the 21,000,000 solutions as something that is nuclear chemistry proof and rare.
Outside of that is a joke.
dApps unused, copypasting bitcoin (or various alt coins), then promoting it as a world changing idea. Various centralized currencies which defeat the entire purpose.
I imagine things like Tether will be the future allowing money to be moved cheaply. As I develop my own coin, I choose to tie it to a very popular investment rather than produce yet another silly 'rare' number.
CryptoCURRENCY needs to move things that are hard to move, cheaply. Crypto that stores and manages data seems like a foolish application due to the enormous expense, unreliable txn times, and unneeded verification.
MakerDAO has the advantage that it is designed so that you don't need to trust any human or organizational player. Just the crypto itself.
Tether can fall apart any minute. (e.g. when Tether executives play dirty)
"If there is a sudden market crash in ETH, and a CDP ends up containing more debt than the value of its collateral, the Maker Platform automatically dilutes the PETH to recapitalize the system. This means that the proportional claim of each PETH goes down."
There's a lot of obfuscation about both that and Tether, but the reality is that a big drop in the asset held for stabilization will break the stability. And the asset is some cryptocurrency, not gold or land or something with a track record. Tether at least claims they have dollars, but their auditors are not convinced.
Gold is good, but as a chemical engineer, nuclear chemistry is a real threat.
I love ETFs, but I think the market is artificially inflated by the current trump bull run.
Bitcoin is used worldwide and can be kept on a cellphone or piece of paper.
I never thought I'd run into someone who believes in crypto and practical alchemy at the same time.
If more Iraqis had had Bitcoin, they would probably have been fine. /s
But the "51% attack" isn't?
I feel you don't really understand the value that cryptocurrency is adding; It is by its nature very easy to move and cheaper to protect than Gold. Its the long bet against eventually everything will be eaten by the state; or by inflation.
Someone steals your wallet with USD, whats the difference?
People act all weird when the word Bitcoin comes up, but its really not that different from gold and USD. Well except it solves a few problems those have.
Cant things be both advantageous and disadvantageous?
You lose a tiny amount of cash and get new cards from your bank. BTC is like carrying around your bank account, it's a whole different ball game.
I don't store the majority of my money in my wallet.
> As I develop my own coin
How is your coin different from copy-and-pastes?
Business as usual, some people make money (those who bought ETC 2 or 3 weeks ago at the dip, and are selling now in BTC or in USD), some people lose money (those who speculated on the ETF success). These are cold hard facts - not the half full, or half empty glass.
The article title however is just dramatization, maybe for clickbait, or maybe intended to please an audience of people mostly hostile to crypto? It is bloomberg that hits a new low.