New Delhi: Virtual currency in the form of Bitcoin, Ether, among others registered their biggest fall ever on Wednesday when the collective cryptocurrency index by almost 80 percent.
The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000, according to a report by Bloomberg.
Like their predecessors during the internet-stock boom almost two decades ago, cryptocurrency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check, particularly those in many secondary tokens, so-called alt-coins.
“It just shows what a massive, speculative bubble the whole crypto thing was — as many of us at the time warned,” Neil Wilson, chief market analyst in London for Markets.com, a foreign-exchange trading platform told Bloomberg. “It’s a very likely a winner takes all market — Bitcoin currently most likely.”
Wednesday’s losses were led by Ether, the second-largest virtual currency. It fell 6 percent to USD 171.15 at 7:50 a.m. in New York, extending this month’s retreat to 40 percent. Bitcoin was little changed, while the MVIS CryptoCompare index fell 3.8 percent. The value of all virtual currencies tracked by CoinMarketCap.com sank to USD 187 billion, a 10-month low.
The virtual-currency mania of 2017, fuelled by hopes that Bitcoin would become “digital gold” and that blockchain-powered tokens would reshape industries from finance to food, has quickly given way to concerns about excessive hype, security flaws, market manipulation, tighter regulation and slower-than-anticipated adoption by Wall Street.
Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite’s recovery to fresh highs 15 years later, and to the internet’s enormous impact on society. They also note that Bitcoin has rebounded from past crashes of similar magnitude.
But even if the optimists prove right and cryptocurrencies eventually transform the world, this year’s selloff has underscored that progress is unlikely to be smooth.