The total value of all cryptocurrencies has gone down by roughly $2T, or two-thirds, since bitcoin hit its all-time high in November 2021
Wall Street Journal : Tweets: @mgsiegler , @hkanji , @imincorrigible , @nefrorantes , @paulvigna , @luciacholakian , @jason , and @briannawu Tweets: M.G. Siegler / @mgsiegler : Nice not-so-subtle Elon call out, @WSJ. https://www.wsj.com/... https://twitter.com/... @hkanji : The cryptocurrency industry was built on swagger, enthusiasm and optimism. All three are in short supply these days, as losses and layoffs mount. https://www.wsj.com/... @imincorrigible : The extraordinary level of crypto spam in the past couple of years explained. #CryptoScam #Bitcoin https://twitter.com/... Dr. Carlos Orantes / @nefrorantes : Hubris, greed and leverage. How the crypto industry grew to wild heights, and what the reckoning looks like. https://www.wsj.com/... Paul Vigna / @paulvigna : Crypto is like combination of Beanie Babies, dot-com stocks and the Velvet Underground: manic, money, and all the cool people are into it. It's also like any other bubble: speculation bordering on delusion, disregard for risk, and greed. https://www.wsj.com/... via @WSJ @luciacholakian : In Argentina, the fall of some cryptos doesn't seem to alter enthusiasts who believe that, in spite of the plummeting, it's still better than the peso. Our report on Latin America and crypto optimism with @andreapaolahg_ and @leomschwartz for @restofworld: https://restofworld.org/... @jason : #cryptocontagion [ FTR: I think there are many great ideas in crypto/web3, but 95% of the projects are scams, run by incompetent people, and/or generally silly. This contagion/crash is going to be hard on many but will be good in the long run. Please be careful with your money ] https://twitter.com/... https://twitter.com/... Brianna Wu / @briannawu : Good morning, another major crypto bank is halting withdrawals. This one is worth 2 billion. Banking is one of the most tightly regulated industries in America, and you'd go for jail for this if crypto weren't a fraud-for-all. https://babel.finance/...
Context & Ripple Effects
The selloff had already accelerated by January, when bitcoin and ether fell more than 50% from their highs amid a sharp one-day market loss. The latest tally frames that decline as a broad contraction across crypto rather than a move confined to the two largest tokens.
It also recalls the 2018 collapse in total crypto market value, showing that large aggregate drawdowns have been a recurring feature of the market's valuation cycle.
First-order effects
- Crypto holders face a roughly $2 trillion reduction in aggregate portfolio value since bitcoin's November 2021 peak.
- The crypto industry is operating with losses and layoffs mounting, reducing the optimism and expansion capacity described in the coverage.
Second-order effects
- The rout extends beyond token holders: related coverage records heavy losses among retail investors and the wealth of major crypto owners, concentrating pressure across the market's investor base.
- Bitcoin and ether's earlier declines set the direction for the wider market, making the largest assets the immediate reference points for pricing across crypto.
Third-order effects
- Repeated market-wide contractions in 2018 and 2022 reinforce a pattern of boom-bust crypto valuations, complicating efforts to present aggregate market capitalization as a durable measure of sector maturity.
- If large drawdowns continue to coincide with layoffs and retail losses, the crypto legitimacy gap will be shaped as much by resilience through downturns as by peak valuations.
The trend: Crypto is exhibiting a recurring cycle in which broad market valuations rise rapidly and then reprice sharply across both major tokens and the wider asset base.