Last May, in Crypto Volatility, I noted that the cryptocurrency bubble had finally burst and I expected 'bitcoin' to trade under $4,000 (down from $8,700 back then) before it could entertain any thoughts of breaking higher again and the vast majority of the other digital coins would disappear into the ether. I followed up with another COTD in June reiterating my price target after bitcoin had dropped -23% to $6,700 (MoneyConf Comes to Town) and the market cap of the sector had dropped $100 billion from $400 billion to $300 billion, based on the 1,642 digital currencies listed on Coin Stats. In that note, I said I expected 90-95% of the 'coins' would end up worthless.
Today, bitcoin is trading just above $6,200 and the market cap of the sector has plunged another $100 billion to ‘just’ $193 billion, based on the 1,974 digital currencies now listed on Coin Stats. I see no reason to change my view as the bitcoin bear market rumbles on. Crypto currencies are an exciting technological innovation and will change the future of money but not before 95% of the ‘coins’ disappear. A digital currency backed by physical gold… Now there is something to get excited about.
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