There Are Too Many Cryptocurrencies, and Investors Are Paying the Price
The new world of ‘shit coins’ is fertile ground for pump-and-dump schemes
Last Wednesday was a rough day for cryptocurrency investors. Cryptocurrencies fell across the board, losing more than $500 billion in value at one point, with Bitcoin plummeting more than 20%. And while the market stabilized near the end of the day and bounced back some over the next couple of days, Bitcoin is still down almost 35% over the past two weeks, with other cryptocurrencies tumbling even more. Dogecoin, most notably, is down 55% since May 8th (that dark day when Elon Musk appeared on Saturday Night Live and joked — or rather, said accurately — that dogecoin was a “hustle”).
This precipitous decline in value in such a short period of time of course underscores why cryptocurrencies are so ill-suited to being actual currencies: no one is going to regularly exchange goods and services for a currency whose value can plummet 25% in a single day simply because Elon Musk said something. But that’s unimportant to most cryptocurrency investors, who see Bitcoin, et.al., not as currencies, but as speculative assets, and also see this kind of massive volatility as par for the course. Painful as these sell-offs are while you’re in the middle of them, they’re relatively easy to…
