The crypto market cap is about 1 trillion USD. Now suppose all current crypto holders want to exchange their crypto for dollars. How many dollars do they get, collectively? The market cap is 1 trillion, but for them to get dollars somebody else has to put up those dollars in exchange for the crypto. And that's a problem, because everybody who thinks crypto is a good idea is already in crypto, which means there is no sizable group of people to sell into.

If all current Apple shareholders decide to get rid of Apple an inflow of 2.5 trillion is needed. The new group of shareholders will like Apple less than the current group of shareholders, so the stock would get sold at a slight discount (10% maybe). The universe of investors who are willing to buy Apple shares at a discount is enormous, so it's fine.

With crypto, not so much. The first 100bn you might be able to sell to people at a reasonable discount, but then you're out of buyers for sure. So who are the holders of the remaining 900bn worth of crypto going to sell to? How big of a discount do they need to offer to get the dollars they want? 30%? 60%? 99%?

With crypto the market cap is an illusion because when people sell crypto en masse the price will trend towards the intrinsic value (which is zero). That's what the parent means with "The money is not there. Some folks will lose. Everyone knows it."

I think they are arguing that the market cap is a fantasy number anyway. It went down by a theoretical $70 billion, but that number (and the market cap) is meaningless because it's not possible to convert large amounts of BTC to fiat without collapsing the market, assuming the exchanges will let you and that they have the fiat reserves to do so, which is highly doubtful.

Not necessarily. It sounded to me like they were dismissing the idea that there was anything to that original value. That there's nothing "lost" because there just doesn't exist $70bn of demand for BTC, it could never be realised