The crypto market is crashing for the same reason real financial markets are crashing. The problems with Celsius are an irrelevant blip.
If it crashes 90% and then goes back to 30% of its peak a couple years later, pundits will declare bitcoin collapsed, but the people that bought around the bottom will make out like bandits.
I dont see many failure modes for crypto itself. The exchanges and all the speculative bullshit built around it are a big problem, but the network itself will survive and there is a price where people will start betting on upside again.
I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table.
It's called gambling and you should consider yourself lucky. Very, very lucky. You basically whine about 90000% ROI when it could've been 900000%. Let that sink in for a moment.
Consider this: many small-scale investors entered the market right at, or very near recent peaks. What would someone say who bought in a year ago for like $50k, not $5? They'd be down over 50% at the moment and there's simply no guarantee the market will recover to the $60k+ levels seen in October and November last year.
Add on top of that people who invested by means of putting their life savings (again, not as uncommon as you might think) into shady operations like Celsius due to their dubious claims of %10 annual returns. They're completely screwed if things go sideways and Celsius closes its doors.
Same thing I'd say to someone that bought Netflix stock around the same time. Gamblers beware.
There's no similar mechanism with crypto. There's no annual dividend that is now on sale.
More likely to simply go to $0 as everyone heads to the exits.
Anyways, there is some kind of floor to which they can fall, and which will catch them.
What kind of "floor" is there for crypto? By definition it is not tied to anything non digital? Right?
Not a finance expert, but I disagree with what you're saying:
There's a feedback loop between:
1. The price of BTC, which depends on people's willingness to mine it (without which, BTC doesn't have security).
2. The willingness to mine BTC, which depends on the price. Why would you mine BTC if you're not sure whether you'll be able to sell it for more than you mined it for?
A decline in 1 can trigger a decline in 2, which can trigger a decline in 1, which can trigger a decline in 2.
BTC can have an end. Oh, and BTC is not like BitTorrent.
The "feedback loop" you describe would reach equilibrium due to difficulty adjustment (blocks could be really slow for some time). Granted it would then become cheaper to 51% attack. Maybe one could consider Bitcoin "dead" at that point but it would still be working.
The biggest, baddest parties will always draw the popular crowd, and the same DJs will know better when to quietly slip out the back door with bags full.
How does a well-regulated party compete against that without calling for more regulation?
In the end though they will probably still call for more regulation because once they have stood the test of time they will want to cement their position.