Yesterday we wrote about how some daytraders might be starting to treat cryptocurrencies like dot.com stocks back in the later 1990s.
Today as if on schedule, the larger cryptocurrencies including Bitcoin moved down hard and fast. Bitcoin moved down some 17 percent, while smaller competitors slid as well.
Ripple, went down some 13 percent to 26 cents. Ether moved down too, though Ether’s downturn actually happened on June 21 as part of a so-called flash crash.
Ether’s price since the beginning of the year has gone up a lot. And Bitcoin is up about 150 percent.
Chipmakers continue to give back higher highs. Nvidia Corp.moved down 1.1 percent and Advanced Micro Devices Inc. gave back 0.6 percent.
The bottom line here seems to be that cryptocurrencies have somehow turned into investments objects rather than “money.” And our daytrading comments emphasized the way these “currencies” are being treated.
There is a general sense, based on rapid rises, that one can accrue a great deal of value if in early enough.
In a sense the real reason for coins’ value is being set aside. When one collects these coins for their so-called value, the other parts are ignored.
In fact, this is probably all to the good from the standpoint of some producers, especially the big banks that don’t really want most of what cryptocurrencies have to offer.
These larger entities would be glad to talk about accrual rates rather than the peer-to-peer independence that such coins offer – which presumably will be stamped out at some point, if possible.
The larger issue indeed is that the coins that will ultimately succeed the most are the ones that maintain the basic business model.
Those who confuse “value” with transactional credibility are likely going to end up at some point with currencies that have neither.