What goes up must come down? All bubbles eventually implode?
Not always, but it appears some crypto investors may share my mind on this matter: cryptocurrencies may not be inherently stable. Other currencies are following suit:
Bitcoin, the most popular and valuable token, fell by more than 20 percent in early morning trading before recovering some of its losses. It sank below price levels not seen since January. Many other top tokens followed suit. Dogecoin investors, who had enjoyed astronomical growth this year, seeing their holdings skyrocket by roughly 10,000 percent, were hit especially hard. The meme-inspired cryptocurrency tumbled by more than 30 percent. [WaPo]
And this must have been particularly alarming for folks with big stakes:
Coinbase, one of the largest cryptocurrency exchanges in the world, reported service disruptions Wednesday morning. An error screen displayed when Web users traveled to the homepage. Customers reported that they were unable to log in, see their balances or trade their tokens, the company said.
Practicalities aside, the real question remains whether or not cryptocurrencies deliver a substantial advantage to its users and the world economy, while remaining relatively isolated from governments and other institutions hostile to its mission. So far, there’s nothing that impresses me – cryptocurrencies appears to blow in the wind, value-wise, while consuming vast amounts of resources. The latter may not be a permanent problem as the various currencies can pursue “proof of stake” mining strategies which should reduce resource consumption, but the former?
And this has been gnawing at me all day:
Bitcoin and other cryptocurrencies are plunging as anxiety spreads through the market — this time, after China took more steps to crack down on the digital coins. [CNN/Business]
It’d sure be interesting to see if Chinese-controlled entities abruptly exited the crypocurrencies prior to China’s announcement. It’d make a nifty way to skim money out of the West by the Communists.
