When Bitcoin rapidly rose towards $20k and above last winter, the bubble’ish nature of the market was obvious. Yet cryptocurrency pushers were insisting it would rise as high as $2 million per bitcoin.
A teacher put $90,000 in cryptocurrencies, including a $25,000 loan. Her investments are now down about 90%. A financial analyst invested $100,000 of his savings. His investments are down 70%. The New York Times reports on the bitcoin bust.
Other than reading the original technical paper on using block chains to implement currency, I have not spent much time on cryptocurrencies.
I definitely see the value of block chain technology and I understand how a currency based on block chain can work. But I was confused as to how a particular cryptocurrency would retain value when two hundred new cryptocurrencies were being introduced into the market, flooding the market with digital medallions.
The mania seemed like the Dutch tulip bubble.