Crypto Collapse Crushes Hedge Funds that Touted Huge Gains for 2017
Crypto Collapse Crushes Hedge Funds that Touted Huge Gains for 2017 by Wolf Richter – Wolf Street
Are they causing the rout by trying to get large sums out of an illiquid market
At the moment, cryptocurrencies and tokens are bouncing up and down in wild, double-digit gyrations by the hour. Bitcoin plunged below $9,300 and as I’m writing this is trading at around $9,800, down about 50% from its peak on December 17. Gone up in smoke in one month: $168 billion.
Ripple, the crypto that has recently been touted as the “next bitcoin” or “better than bitcoin,” plunged to $0.88 and is currently trading at $0.98, still down 76% from its peak on January 4. Gone up in smoke in two weeks: $110 billion.
Ethereum, after having plunged to $775, is now at $852, down 40% from its peak on January 13. Gone up in smoke in two weeks: $60 billion.
There are now over 1,400 of these “cryptocurrencies” and “tokens” out there, according to CoinMarketCap. Anyone can issue a new one. The supply is unlimited. On January 8, they were valued at $830 billion. Now they’re valued $472 billion. About $358 billion have been eradicated or transferred from those holding the bag to those that got out early.
Then there’s BitConnect, which is down 97% from $476 on December 28 to $14.39 currently, but bouncing wildly up and down. Nearly $4 billion evaporated, using the number cited by the Texas Securities Commissioner, which has entered an Emergency Cease and Desist Order. The Securities Division of the North Carolina Department of Secretary of State has issued a Temporary Order to Cease and Desist. Much of the operation has now been shut down.
“Gain financial freedom with a secure and practical alternative to centralized banking,” BitConnect said on its website. In the crypto-craze, people fall for anything.