Picture: BLOOMBERG/CHRIS RATCLIFFE
Picture: BLOOMBERG/CHRIS RATCLIFFE

Hong Kong — The Great Crypto-Crash of 2018 looks more and more like one for the record books.

As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80%. The tumble has now surpassed the Nasdaq Composite Index’s 78% peak-to-trough decline after the dotcom bubble burst in 2000.

Like their predecessors during the internet stock boom almost two decades ago, crypto-currency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check.

The virtual-currency mania of 2017 — fueled 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 dotcom era by pointing to the Nasdaq’s recovery to fresh highs 15 years later, and to the internet’s massive impact on society. They also note that bitcoin has rebounded from past crashes of similar magnitude.

But even if the optimists prove right and crypto-currencies eventually transform the world, this year’s sell-off has underscored that progress is unlikely to be smooth.

Bloomberg

Please sign in or register to comment.