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Cryptocurrencies Collapsed

Discussion in 'Digital Currencies' started by Scorpio, Jul 13, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Cryptocurrencies Collapsed
    by Wolf Richter • Jul 11, 2017 • 118 Comments

    Ethereum down 52%, Ripple down 57%, EON down 70% in eight days.

    A “collapse” isn’t when something edges down 1% in value or even 10% or 20%; it’s when something plunges 50% in a short time.

    Ethereum has collapsed 52% in four weeks. The second largest cryptocurrency by market capitalization had surged from $0.95 at the end of 2015 to $8.21 by the end of 2016; a gain of 764% in one year. Then it surged to $400 by June 13, according to CoinMarketCap; a gain of nearly 5,000% in less than six month. Over the 18-month period, it multiplied by 421 times. That’s a 42,000% gain. No wonder hedge funds have piled into this madhouse. But in the four weeks since then, it has collapsed by 52% to $193.

    And its market capitalization plunged from $37 billion to $18.2 billion. In other words, $18.8 billion, over half of that $37 billion in imaginary wealth, has been left behind in the imagination.

    To be honest, a lot of “investments” these days are like this, but the dynamics here are on steroids, condensing the entire experience from years into weeks and days.

    Ripple has collapsed 57% in seven weeks. The third largest crypto coin had surged from $0.006 on March 17 to $0.42 on May 17, to a market cap of $16.2 billion, having thus multiplied by a factor of 70. For percentage lovers, it skyrocketed by nearly 7,000% in just two months. Today it’s at $0.18. Down 57% in seven weeks! Its market cap has plunged to $7.1 billion – down $9 billion in seven weeks.

    Bitcoin has plunged “only” 21% in one month. The granddaddy of crypto coins had soared to just about $3,000 by June 12, and a market cap of $48.5 billion. Since then, it has plunged 21% to $2,366 and a market cap of $38.9 billion. Another $9.5 billion down the drain in just a few weeks.

    Between these top three crypto coins, about $35 billion in “wealth” has returned to the ether in two months.

    However, Litecoin, the fourth largest crypto coin, is on a different schedule. Like Bitcoin, it already experienced a dizzying spike and subsequent collapse from October 2013 through May 2015, skyrocketing 2,500% in one month, from $1.90 to over $50 by November 28, 2013, only to collapse 99% to $1.40 by May 2015.





    Then there was another spike, but smaller and briefer. And since March 2017, all heck has once again broken loose. This time, it soared from $3.80 on March 1 to just over $50 by June 20, then plunged, then recovered, then wobbled, and now is once again falling. Currently at $45.09, it’s down only 10% from its peak. Given how things went after the prior two spikes – total collapses toward nothingness – caution might be in order.

    EOS collapses 70% in eight days. Another illustrative example further down the list, the 11th largest crypto coin by market cap came out of nowhere on July 1 via an “Initial Coin Offering” – similar to an IPO but without regulations, required disclosures, filings, etc. It’s a free-for-all. Unlike an IPO, an ICO offers no ownership of the company. The tokens are all you get.

    Here’s a good analysis:

    EOS is going to be one of the hottest ICOs on Ethereum network. Even though, Ethereum is just a place for EOS to fund (EOS will have its own blockchain like Omise Go), I expect Ether price will be supported because EOS will conduct its crowdsale for the whole year! Due to its crowdsale model, I expect that everyone who wants to buy tokens, will be able to do this. The most important promised feature of EOS is its scalability. The numbers are really amazing.

    EOS shot up from $1 on July 1 to $5.40 on July 3. That day, there was this interesting analysis:

    Block.one, the developer of EOS, has been great with marketing, as even Reuters and the New York Times wrote about the token. These factors have helped the cryptocurrency nearly become one of the top 10 biggest cryptocurrencies by market cap, as according to data from CoinMarketCap, EOS is currently number 9 with a $747 million market cap, each token being worth $4.68.

    Now it’s at $1.61, a collapse of 70% in eight days.

    The hope is that dip buyers will soon be piling into all these tokens and make current holders whole again.

    These price movements are like those of numerous highly regulated and even more highly touted IPOs. It just doesn’t play out over months and years, but over a few days. It’s a very concentrated form of nerve-tingling addictive fun that gets people to check their apps furtively every few minutes during even important meetings – and some of them disappear to the bathroom to vomit.

    But the company behind EOS raised $185 million in real money. That’s serious business. EOS was the largest ICO ever. Days later it was surpassed by Tezos ICO, which raised $200 million in four days and continues to raise money but hasn’t started trading yet.

    Whatever the company might be doing, buyers of ICOs are not getting any ownership in it. They’re getting the tokens and the hope that those tokens will fund their retirement and that they don’t ever have to sit through another shitty meeting again. Meanwhile, the company gets their real money.

    There are now 970 of these tokens – 812 “currencies” and 161 “assets” – according to CoinMarketCap. Over 100 of them have been added over the past two months, as everyone and his dog can do ICOs and issue new crypto coins for others to buy with their real money. Getting people to buy them is another story, as attested to by hundreds of now worthless or nearly worthless crypto coins in the pile.

    But once the hype takes, particularly if you get some googly-eyed writers at the mainstream media to fawn over it, it’s a miracle to behold.

    Given the rocket-like price appreciation when there is concentrated buying, hedge funds are now touting their crypto coin investments. Throwing a few million real dollars at one of the smaller crypto coins can produce price surges of thousands of percent. And a few hundred million thrown at larger crypto coins, along with the requisite hype, can unleash real fireworks.

    But trying to get those millions or billions (?) of dollars out? Big players have a hard time selling these coins in large quantities for real money: there are no market makers, and liquidity evaporates when the selling starts. Just as large buys cause price surges, large sales – as these buyers are trying to get out – reverse those surges. Hence the enormous swings, where billions of dollars in “wealth” are created in just days that then evaporate nearly as quickly.

    But those who got in early and get out in time walk away with huge gains, at the expense of the later arrivals whose money allowed the early comers to exit. In this too, these tokens aren’t all that different from other overhyped investments. It just happens in a much shorter time-frame with much higher percentages. Since the tokens trade all the time, the nerve-tingling fun is 24/7, so you can get your shot of adrenaline in the middle of the night. And when your tokens get crushed, there’s always the hope that next time you look, they’ll be back up.

    There are some factors in the stock market that are like a tsunami siren that should send inhabitants scrambling to higher ground. But this one will be ignored until it’s too late. Read…


    http://wolfstreet.com/2017/07/11/what-is-going-on-with-crypto-currencies-collapse/
     
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  2. Joe King

    Joe King Gold Member Gold Chaser

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    That's only due to the fact it is such a small market.
    ...but somehow these people that write this stuff are shocked that it doesn't act as a mature market that's decades old.


    Same can be said of other commodities. Remember Ag in 2011? It approached $50 and virtually everyone suddenly wanted "their" money out of their silver and the price plummeted. Housing market is the same, too. Ie: everybody can't get their millions out without getting someone else to take their place in the market. Demand is the only thing that holds up the price of anything.
    ...and I'm glad these big players have a hard time getting dollars out of large amounts of bitcoins. I'd prefer those players not be in the crypto markets at all. BTC should be for the little people. The big players have their markets that they've already rigged in their favor, so they should keep their grubby hands off btc.


    Also, if I had a bitcoin for everytime bitcoin has been declared to have crashed, I'd have a million worth of btc by now.
     
  3. Cigarlover

    Cigarlover Gold Member Gold Chaser

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    For the retailers out there, I wonder how they are feeling about accepting bitcoin now. Is it possible to hegde bitcoin and sell it short? Is it possible for them to unload BTC as soon as they accept it for goods or services?
     
  4. Joe King

    Joe King Gold Member Gold Chaser

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    I'm pretty sure that's how it works. It's converted at time of sale.
     
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  5. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    The problem with them is volatility. What professional retailer wants to keep them if they don't know what is their average value? Difficult to estimate revenues if what you accept as payment could be +/- 20% a month. No way to plan, you would just be guessing and that is no way to sustain a business in the long term.

    All these cryptos are designed so arbitragers can part the stupid from their savings. It's like unregulated gambling at this point and I'm not so sure it isn't rigged either. Why not start a new crypto and retire in 6 months if you can sell them all? Most likely there is an initial wave and then the music stops. But you are not holding any gold or silver coins.
     
  6. #48Fan

    #48Fan Silver Member Silver Miner

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    Sounds like you might be in the market for some Useless Etherium Tokens (UTC). I heard they can only go one direction.... Up! Right now, they are trading at about $0.02US, lmao.
     
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  7. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    Isn't she lovely... isn't she wonderful....
    [​IMG]
     
  8. GOLDBRIX

    GOLDBRIX God,Donald Trump,most in GIM2 I Trust. OTHERS-meh Site Supporter Platinum Bling

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    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
    I wonder how many heads this flew over Goldhedge. :reading:
     
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  9. the_shootist

    the_shootist I self identify as a black '69 Camaro Midas Member Site Supporter ++

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    I stayed out of the crypto currencies for better or for worse. I had my chance and my gut said to pass. I'm still not sure how it will go but I'm still not willing to jump on that train
     
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  10. BarnacleBob

    BarnacleBob GIM Founding Member & Mod. Founding Member Site Mgr Site Supporter

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  11. GOLDBRIX

    GOLDBRIX God,Donald Trump,most in GIM2 I Trust. OTHERS-meh Site Supporter Platinum Bling

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  12. Silver

    Silver Gold Member Gold Chaser

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    You fucked up :)
     
  13. GOLDBRIX

    GOLDBRIX God,Donald Trump,most in GIM2 I Trust. OTHERS-meh Site Supporter Platinum Bling

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    He aint the only one.
    AND
    As a GIM Hero is noted for saying "If you don't hold it you don't own it".
    SO
    Until you got something physical in your hand Crypto-currency is a ghost of potential.
     
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  14. Joe King

    Joe King Gold Member Gold Chaser

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    People have been saying that since it hit $5 and every new high since.
    The way I see it, if it does end up going as high as some say it might, what's the harm in having a few bucks worth?
    I still got my single Mercury dime so if Ag goes to da' Moon, I'm covered there too. I don't really see much of a difference. Price of both is based on supply and demand.


    As long as the blockchain exists and you control the keys to a portion of it, I'd say you do hold something.
    ...and with CB's interested in blockchain technology, it seems to me that people either use the open-source one that's available now or the proprietary one that the CB's will at some point likely end up using, and everyone else by extension too.

    The way our ever increasingly connected World is progressing, combining blockchain technology with the FRN seems the likely way of the future IMO. It'd be a way of keeping track of every dollar ever created. Every Note already has a serial number, so how much would it take to incorporate those numbers into a type of blockchain that then allows those dollars to be used person to person outside the banks network? That is all that's lacking to be able to have a cashless "monetary" system.
     
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  15. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    I think some kinf of fraud will occur and the government will crank down on it.
     
  16. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    Only way to "GAMBLE" with this I see is when it's .02 put $100 or whatever into it. If it goes to zero pull your principal out. If it goes up to .10 take your hundred and put it back in your pocket and let the rest ride. Goes up to whatever take half and let the rest ride. Goes to zero you profited and goes to da moon your covered also.
     
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  17. Bottom Feeder

    Bottom Feeder Hypophthalmichthys molitrix Silver Miner Site Supporter

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    Mr. Ponzi would have liked very much to have been as invisible as this ‘bit coin’ magician.

    BF
     
  18. the_shootist

    the_shootist I self identify as a black '69 Camaro Midas Member Site Supporter ++

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    Yes sir, on some things I have but I think I'm pretty much in the black overall!
     
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  19. Aurumag

    Aurumag Dimly lit. Highly reflective Midas Member Site Supporter

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    Cryptocurrencies will inevitably be regulated by fed.gov, because each and every day (excepting federal employee union-negotiated holidays) a new Swarm of Officers is sent hither to eat out our substance.
     
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  20. Aurumag

    Aurumag Dimly lit. Highly reflective Midas Member Site Supporter

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    By the way...

    I've been trying to warn you all for many years now that the bankster cabal is in the process of usurping the blockchain in general and cryptocurrencies in particular.

    If you want to remain innocently naive, then do not select the link below which will direct you to the entity which has historically usurped, and will continue to manipulate every form of monetary currency.

    The Whore of Babylon.

    or this one
     
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  21. Flight2gold

    Flight2gold Silver Member Silver Miner Site Supporter ++

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    I'm sure all here will agree that all crypto currencies are speculation but there's no arguing that if you would have speculated
    $100 back in 2010 and let it ride until a couple weeks ago you would have been sitting on an account worth millions.
    Granted, trying to get out of the market would have been difficult but I seriously doubt anyone who did that would be posting on any forum or be too worried about that Bitcoin was just another form of fiat.
     
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  22. the_shootist

    the_shootist I self identify as a black '69 Camaro Midas Member Site Supporter ++

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    Why am I not surprised that the devil has a vagina?
     
  23. Bottom Feeder

    Bottom Feeder Hypophthalmichthys molitrix Silver Miner Site Supporter

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    I suppose ole nick can have anything he wants as a body part.

    BF
     
  24. SilverCity

    SilverCity Gold Member Gold Chaser

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    Is all this silvah positive?

    SC
     
  25. Joe King

    Joe King Gold Member Gold Chaser

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  26. lumpOgold

    lumpOgold Gold Member Gold Chaser Site Supporter

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    I'm guilty, I dumped 2,000,000+ Dogecoins during the heyday and bought 4 ounces of gold. I feel like the smartest speculator ever. The market cap for Doge went from around $50 million to over $400 million, and I knew it was time to dump it on the world. I'm still stuck with over a million dogecoin, so if you want some I can share.
    upload_2017-7-17_12-51-25.png

    This guy is probably kicking himself a bit now, he came back and bought MORE the next day! (Though I can't sympathize with him because he's a car dealer.)
    upload_2017-7-17_12-55-4.png
    upload_2017-7-17_12-55-4.png
    upload_2017-7-17_12-51-25.png
     
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  27. anywoundedduck

    anywoundedduck Gold Member Gold Chaser

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    One day, after The Fed has accumulated a heavy percentage of crypto currencies, they will announce the birth of Fed Crypto currency, and dump their holdings in the other Cryptos at the same time.
    That is their play book to a T.
     
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  28. Bottom Feeder

    Bottom Feeder Hypophthalmichthys molitrix Silver Miner Site Supporter

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    Sounds like a plan.

    Is there a difference between Cryptocurrencies and money in a bank account? Aren't they both just electronic dots?

    quote from somewheres:

    'electrons know nothing about radio, even they swim like fish among the capacities, the resistances in a sea of potential'

    BF
     
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  29. lumpOgold

    lumpOgold Gold Member Gold Chaser Site Supporter

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    Fiat currency and crypto currencies are backed by the same ephemeral wishful thinking of a herd.
     
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