By Michael Snyder
Over the last seven months, we have witnessed a cryptocurrency collapse that is so epic that it is truly difficult to put it into words. Last November, the total market capitalization for all cryptocurrencies crossed the three trillion dollar mark. This week, the total market capitalization for all cryptocurrencies actually dipped below one trillion dollars. In other words, approximately two-thirds of the value of all cryptocurrencies has already been wiped out. Some are calling this a “crash”, but the truth is that this is the sort of full-blown “collapse” that so many have been warning about for such a long time. A lot of crypto investors are now deeply in the red, and the outlook for the months ahead is very bleak.
Back on November 8th, Bitcoin was selling for more than $67,000. If you sold your Bitcoin at that moment, I salute you.
On Tuesday, the price of Bitcoin actually dropped below $21,000 for a short period of time…
Bitcoin briefly fell below $21,000 on Tuesday in Asia before bouncing back slightly, continuing its plunge as investors sold off risk assets.
The world’s largest cryptocurrency was down around 7% and trading at $22,531.22 at around 05:13 a.m. ET, according to Coindesk data. Bitcoin is trading at its lowest level since late 2020. Other digital coins including ether tumbled were also sharply lower.
As I write this article, the price of Bitcoin is hovering around $22,240.
At this point, Bitcoin has plunged more than two-thirds from the all-time high that was set last November.
Will it eventually bounce back?
The optimists certainly hope so, but the race for the exits only seems to be accelerating. In fact, cryptocurrencies have lost 200 billion dollars in value just since Saturday…
The market capitalization for cryptocurrencies slipped below $1 trillion on Monday for the first time since February 2021, data from CoinMarketCap showed. Around $200 billion has been wiped off the market since Saturday.
Overall, the total value of all cryptocurrencies has declined by more than 2.1 trillion dollars since November 8th.
Needless to say, some of the most prominent “crypto billionaires” in the world have been absolutely monkey-hammered.
For example, Changpeng Zhao was worth 95.8 billion dollars on paper on November 9th.
Today, his fortune is valued at just 10.2 billion dollars…
Changpeng Zhao, 44, the founder of Binance, has now seen his personal fortune – once the world’s 11th largest, fall 89 percent to $10.2 billion, and Sam Bankman-Fried, the 30-year-old CEO of crypto trading platform FTX, has seen his fortune decline 66 percent since it peaked at $26 billion, according to Bloomberg.
How would you feel if you lost 85.6 billion dollars?
But don’t feel too sorry for him. He can still walk away with 10 billion dollars if he sells everything now.
Coinbase founders Brian Armstrong and Fred Ehrsam have also seen their fortunes shrivel up at a very frightening pace…
And Coinbase Global founders Brian Armstrong, 39, and Fred Ehrsam, 34 – who were once worth a combined $18.1 billion have seen their fortunes shrink to just $2.1 billion each, as shares of their company – the largest U.S. crypto exchange – fell 79 percent.
On Tuesday, Coinbase announced that they will be laying off 18 percent of their workers.
If they truly believed that cryptos would soon bounce back, they would not be making such a move.
In a blog post detailing why the company has to lay off so many people, Armstrong explained that he believes that we are “entering a recession”…
After extending a hiring pause and rescinding some accepted job offers, Coinbase says it will lay off approximately 1,100 employees, or 18% of its global workforce, as the company braces for a potential recession and “crypto winter.”
“We appear to be entering a recession after a 10+ year economic boom,” Coinbase CEO Brian Armstrong wrote in a blog post on Tuesday. “A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”
Sadly, he is quite right.
We are definitely entering a recession, and it is going to be extremely painful.
Of course there are others in the crypto community that are not willing to give up their optimism. For example, the Winklevoss twins were recently spotted belting out a stirring rendition of an old Journey classic even as the value of their holdings continued to fall…
A video of the Winklevoss twins singing Journey’s hit song ‘Don’t Stop Believin’ has gone viral as the siblings lose billions of dollars amid a cryptocurrency market crash and have been forced to lay off a whopping 10 percent of the staff at their startup.
The video, posted to Twitter by user Arch Nem on Thursday, shows Tyler singing the hit song off-key at the Wonder Bar in Asbury Park, New Jersey – where Bruce Springsteen launched his career – while Cameron played an electric guitar.
Of course if they actually believed that the future is bright for cryptos they would not be laying off a significant chunk of their employees.
If we could actually use cryptocurrencies to buy the things that we need on a daily basis, they would be far less volatile. But national governments around the globe will never allow that to happen.
Up to this point, the primary draw for most cryptos has been the fact that many investors were convinced that they would appreciate in price. A lot of people wanted to get rich quick, and there are some that actually did.
But ultimately cryptocurrencies do not possess any intrinsic value. I really like how Mike Adams recently made this point…
You can’t create real wealth by programming computers to burn electricity to solve complex mathematical problems that are presented as obstacles merely to “demonstrate work.” This does not grow food, create steel, provide labor, mine minerals, transport gas or perform any other useful real-world function. It merely burns electricity and allows a few people for a temporary period of time to pretend like they are billionaires because they have shared ledger spreadsheets containing larger and larger numbers.
If you were able to make a lot of money before the crypto market finally collapsed, I think that is great.
Unfortunately, a lot of investors are now deeply in the red.
As I have reminded my readers over and over again, you only make money in the financial markets if you get out in time.
Nothing in the financial world lasts forever.
The crypto apocalypse is here, and it certainly won’t be the last “apocalypse” that Wall Street experiences.