In an article posted in Bloomberg, I recently read about the current drop of the cryptocurrency market (which I didn’t need to read about, I follow along for a living.)
As most of you know, Bitcoin’s rise last year had it’s fair share of nay-Sayers who were calling it one of the most speculative investments of all time. If you are one of those people, and looking to call it a “bubble,” well, you may be able to possibly say that very soon. (I, however think otherwise.)
The Current Bitcoin Price Drop
“You’ll have to see the market reverse before you see” institutions pile in, Peter Smith, chief executive officer of Blockchain Ltd., which introduced a crypto trading platform for professional investors on Thursday, said in an interview on Bloomberg Television.
On Friday (yesterday) bitcoin was down as much as 4.2%, equating to $5,791, which was the lowest level it’s traded at since November of 2017. While it has gone up 500 points since then, as I type this article, that was a loss of 59% last year and a second quarter slide of 14%. Ether and Litecoin fell even harder, and the total value of all tokens under watch by CoinMarketCap.com dropped as low as $236 million. In the height of all of the crypto madness, these same tokens were worth roughly $830 billion.
It’s hard to find out what caused yesterday’s large drop, but there were two hacks on exchanges in South Korea. Also, there was a regulatory movement in Japan which cast a shadow over the industry a few weeks back. Some regulators have cited that these tokens are ripe for illicit activity taking place like laundering money, manipulation of value, and even fraud.
There are around 800 coins that are really worth NOTHING, according to “Dead Coins.” Another site, Coinopsy, says this total is over 1,000. There are less than four percent of coins with a market cap between $50 and $100 million that were doing well or showing promise, in an analysis done just recently in March by the ICO advisory firm Satis Group.
Lesser-known tokens have been hit the hardest. Dead Coins lists around 800 that are effectively worth nothing, while Coinopsy puts the tally at more than 1,000. Fewer than 4 percent of coins with market caps from $50 million to $100 million were successful or promising, according to a March analysis from ICO advisory firm Satis Group.
Where Will We Go From Here?
As a long time investor, I’m saying “HODL.”
I’m a firm believer in the long term use cases for cryptocurrency. Not panicking one bit. These waters have been tested before, and the long time believers will be rewarded. Of course, invest and trade at your own risk.