What it means? It means people realized there is no inherent value in a tech the tries to solve already solved problems in am extremely inefficient way.
It's not decentralized. It's not free or self-sovereign. It's not honest money. It's not a store of value or an inflation hedge.
It's also not free of nation state influence. Any nation state that wanted to invest the money could 51% attack or more likely sabotage these systems in a more covert way. Nasty dictatorships like North Korea or Putinistan constantly scam and hack the cryptocurrency ecosystem to siphon off money to fund their regimes. Any state could place regulations in the way of the actual use of cryptocurrency and kill it even if the tech worked fine.
It might have been some of those things when it was small. Since then scaling problems inherent in this first generation of the tech led to all forms of hidden centralization, industrial economies of scale led to mining cartels, and perverse economic incentives (some built into the crypto system) led to it being dominated by scams, gambling, and pyramid schemes.
Its goals were not necessarily bad. It just failed to achieve them.
Edit: social media also failed to achieve many of its goals, becoming instead a cesspool of bullshit and a dragnet for surveillance. I think there's a lesson in here about how totally unique unknown unknown problems tend to manifest in interactive information systems at enormous scale. Systems behave very differently when you scale them out to millions, hundreds of millions, or billions of participants or nodes than they do at toy or early adopter scale. It's not just decentralized systems that are bitten by this. Centralized media are bitten too, just in different ways by different sorts of problems.
Do you have any evidence of which chains this happened to?
* North Korea: Missile programme funded through stolen crypto, UN report says https://www.bbc.com/news/world-asia-60281129
* North Korea’s Crypto Operations Are Supporting Its Nuclear Program https://thediplomat.com/2022/04/north-koreas-crypto-operatio...
* Could Putin be exploring cryptocurrencies to bypass western sanctions? https://www.theguardian.com/business/2022/mar/01/could-putin...
BTC is down 33% *in a month*. Its not even remotely comparable. YTD, its below 60%.
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I got some buddies in Celsius right now. Has there ever been a circumstance in "the stock market" where you've been unable to access your funds for a week, with _NO_ contact from the CEO or an explanation of what the hell is going on?
EDIT: Whatever happened to "inflation hedge" and "store of value" promises from the community by the way? No one in the stock market promised those things. But as inflation ticked up to 9%, BTC completely collapsed.
A more apples to apples comparison would be comparing crypto market to tech stocks. In which case yes there are valid comparisons.
Tech companies were playing with blockchain this past year, and are now getting burned. You've got cause-and-effect backwards here.
If you didn't live during that time, then you wouldn't know anything of that era. Yahoo was the #1 search engine. No one cared much about Google. Amazon was a book store.
Ebay was far bigger than Amazon for general purpose goods. Webvan was your hope at making the internet mainstream. Etc. etc.
The biggest "internet" company was either AOL or Netscape IMO. Neither of them really the winner over the next 20 years.
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If you lived in that era, you would know just how unlikely it was that you'd have picked Amazon or Google out of the ashes.
Chances are, you would have been caught up with Enron and Worldcom's schemes, just like everyone else was.
In any case, Celsius has managed to convince a lot of people that their 10% or 20% APY stablecoins and "staking platform" was risk free. Sometimes, these people need to have their own money burned, before they believe in the potential of risk.
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I don't know anything about internet celebrity figures. But I do know a thing or two about risk-free rates and reasonable return rates.
Celsius locked everyone's accounts on Monday, _BEFORE_ hiring those bankruptcy law firms.
By the time you heard the news of the bankruptcy lawyers, it was already too late. Your funds were locked.
The swings in crypto are just bigger, just like swings are bigger in stock market than in bonds.
You can go to the stock market and buy shares and then actually get the thing. If you buy enough shares of Ford, for example, you can walk into the factory and drive off with any car you see, because you would literally own that car. If you buy enough shares of McDonalds you could rename it to McDowell’s if you wanted.
That’s pretty different to what would happen if you bought every Bitcoin in existence.
But it’s not true. With crypto you’re buying an entry in a ledger and the hope that other people will want to buy that entry from you later.
With stocks you’re buying actual shares of an actual company with actual assets, and you now have an ownership claim on those.
Crypto is like taking the stock market and removing the only thing that actually gives stocks value, then selling the stock anyway.
Because shorting isn‘t free, and as the old saying goes, the market can remain irrational longer than you can remain solvent.
These days it is "quaint" to consider stock dividends, but in ye olde days they were supposed to be owning part of a capital machine to turn commodities inputs into widgets, selling those widgets at a profit and giving back dividends to the stock owners. If the stock was producing dividends at $1/share then the price would have a floor at around $10/share assuming those dividends held steady.
There's no floor under crypto because the incoming cash flow from people trying to get rich entirely funds the outgoing cash flow for people who are rich or who are running for the exits. Once the pool of actual money in the system goes to zero then you have more people running for the exits than are throwing cash into the system and the price discovery rapidly goes to zero.
There is some theoretical floor because if people are throwing thousands per day into the system while people are trying to extract millions per day, then if you cut the price down by 1,000 the flows are theoretically balanced. This is the proverbial "well if bitcoin goes to $50 then I'll buy a BTC every week so there must be a price floor". But at that point the exchanges have all gone bankrupt and your $50/week won't keep the lights on, so the owners of the exchanges have fled to sandy beaches with the remaining millions, or gotten arrested, or been assassinated.
This is also why you shouldn't try shorting the market. The exchange where you place those bets on may disappear.
Of course you could short Microstrategy on the actual stock market, but I suspect those options are going to be extraordinarily expensive at this point because everyone is thinking that (and BTC is not likely to go to zero tomorrow, its likely to keep shuffling on like a zombie for months[*]).
[*] I suppose I should more accurately assert that nobody knows when it'll go to zero and the problem is timing it accurately because shorting always has a time-cost, and I certainly don't know how to do that. But it does seem to be running pretty hard into a brick wall at the moment. My statement is less of a prediction and more of a rationale of why I'm not running out to short Microstrategy right now.
Do they? If there were no magic 10x, 100x, and 1000x returns in crypto and it only solved the centralization problem, would even 1 out of 100 current crypto proponents still care about it?
I'd argue it's the risk of volatility which both drives high returns and suppresses these uses, so a stabilization of market prices would eventually see growth in these use-cases as their potential audience puts proportionally less weight on the risk-factor.
One might not see 1 out of 100 current investors remain, but do think that these audiences could grow to equal or surpass such a small segment of the current interest.
Right now the belief of most bitcoin/crypto adopters is that it’s a way to get rich quick
Like most macroeconomic forces, it matters more what the majority believe to be true than what the vision is for something, whether it’s true or not.
But that's besides the point, croins failed as currencies and are closer to investment vehicles (without fundamentally valuable assets underneath).
The problem is bitcoin is being treated like an investment because of “greater fool theory” and no one is treating it like a currency in any meaningful way. It’s crashing because it’s not showing its value as an effective currency. At least not yet. Right now it’s a store for excess liquidity and that makes it too volatile to function as a currency.