As of this week, cryptocurrency market have lost more percentage-wise than what was lost during the Dot Com crash of the late 1990s. It is looking more and more like the Crypto Crash of 2018 is breaking records.
The MVIS CryptoCompare Digital Assets 10 Index continued its losses with a collapse of some 80% since January. This collapse as now surpassed Nasdaq Composite Index’s crash in 2000 which was a collapse of around 78%.
The situations are in retrospect quite similar to the internet boom that gripped markets just two decades ago. Just like then, cryptocurrency investors now were speculating and betting on a life-changing technology which would revolutionize every facet of daily life. It was arguably speculative like the Dot Com boom and bust, but now many are suffering. Altcoins have taken as especially hard hit even though Bitcoin has managed to bounce off 5.8-6k support a few times now.
This week’s losses were led by Ethereum (ETH), the second-largest cryptocurrency and the project that brought the world smart contracts on the blockchain. On Sept 12, ETH saw itself drop to $171 extending this month’s crash from the previous month by 40%. Although Bitcoin saw little changes, we are seeing the entire market capitalization of cryptocurrencies fall to a 10-month low, now sitting at around $187 billion.
Naturally, much of this started over the so-called ‘digital gold’ rush and blockchain-powered projects took center stage as being potentially life-changing. The crypto bulls have been dismissing claims that the bear market will continue, but they have been battered significantly this year.
The one good news despite all this is that capitulation, the event that everyone in the space seems to be waiting for, might soon be around the corner. Although crypto has now extended its losses past the Dot Com bust, if we remember, the Dot Com bubble also went on to the produce some of the largest companies in the world currently. For example, although Amazon stock lost some -90% during the crash, it has since reached all-time highs and has recovered to be worth around $1 trillion.