1Q 2018 Cryptocurrency Collapse

The rise and fall 

of the crypto-currency

sector may be 

the fastest bubble growth

and bubble collapse, 

of any asset sector 

in history.

Crypto-currencies are okay for criminal

activity, and trying to evade capital gains

taxes -- they have almost no other use.

except for high risk speculation.

World financial regulators are concerned

about initial coin offerings (ICOs), 

where anyone can try to sell 

homemade digital tokens 

to the gullible public,

and take their “fiat” money.

There are now about 

1,600 crypto-currencies 

and tokens out there.

At the end of January 2018, 

Facebook announced

“misleading or deceptive ads 

have no place on Facebook,” 

and prohibited ads about 

ICOs and cryptos.

On March 14, 2018,

Google announced 

that it will block ads 

with “cryptocurrencies 

and related content,” 

including ICOs, 

cryptocurrency exchanges,

cryptocurrency wallets, 

and cryptocurrency trading advice,

beginning in June 2018.

On March 26, 2018

Twitter announced

it would ban ads of ICOs, 

crypto-currency exchanges, 

and crypto-currency wallet services, 

unless they are by public companies 

traded on major stock markets,

by the end of April 2018.

On March 29, 2018

MailChimp, a major email 

mass-distribution service, 

announced that it will block 

email promos from businesses 

that are “involved in 

any aspect of the sale, 

transaction, exchange, 

storage, marketing or 

production of 

cryptocurrencies, 

virtual currencies, 

and any digital assets 

related to an Initial Coin Offering.” 

This broadened and tightened 

their February 2018 policy that

promised to shut down 

any account related to promos 

of ICOs or blockchain activity.

The crypto-currency 

market capitalization, 

peaked January 4, 2018, 

when market cap 

reached $707 billion, 

according to CoinMarketCap. 

Less than three months later, 

market cap plunged 

by 65% to $245 billion.

Here’s how the top five 

cryptos did over the 

past few months

through late March 2018. 

(The five, in total, account for 

about three-quarters of

the total market cap 

of the sector):

Bitcoin 

plunged 67% 

from $19,982 

on December 17, 2017,

to $6,573 recently. 

Ethereum 

plunged 74% 

from $1,426 

on January 13, 2018,

to $367 recently.

Ripple 

plunged 88% 

from $3.84 

on January 4, 2018, 

to $0.47 recently.

Bitcoin Cash 

plunged 85% 

from $4,138 

on December 20, 2017, 

to $632 recently.

Litecoin 

plunged 70% 

from $363 

on December 19, 2017,

to $110 recently.

The Litecoin founder 

admitted on December 20 

that he’d cashed out 

at or near the peak 

by selling his entire stake. 

EOS 

plunged 71% 

from $18.16 

on January 12, 2018,

to $5.30 recently.

The blockchain technology

 ( distributed ledger technology ) 

has nothing to do with cryptos. 

Cryptos merely use the technology. 

There have been failed efforts 

for many years to find 

large-scale commercial use 

for blockchain, outside of 

the crypto sector. 

Costs to mine a Bitcoin 

now match, or exceed,

the recent value of the coin.

There's no incentive to mine more, 

unless transaction fees go much higher.

Power consumption 

continues to go up fast

with number of transactions 

increasing.

Energy consumption seems to be 

geometrically increasing with 

the number of times a Bitcoin is used, 

and number of nodes 

it is distributed across.

Other cryptos require 

similar power consumption, 

because the blockchain’s 

most important‘security attribute' 

is the huge energy use 'sinkhole'.