Cryptocurrencies Collapsed

PHOTO: Jim Urquhart/Reuters

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

By Wolf Richter | 11 July 2017

WOLF STREET — 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. […]

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