You are here
Crypto wealth sinks US$52b in week of lambos, yachts
SO much for the Blockchain Week bump.
With thousands of cryptocurrency diehards swarming into Manhattan for this week's Consensus 2018 conference, the prediction from bitcoin bulls like Tom Lee of Fundstrat Global Advisors was that the hype-fuelled gathering would trigger a market rally.
Alas, not even a trio of (rented) Lamborghinis, a 1,000-person yacht party and a performance by 46-year-old rapper Snoop Dogg could prevent the value of virtual currencies tracked by Coinmarketcap.com from sinking by US$52 billion since May 11.
Bitcoin, the most popular of the bunch, dropped 5.2 per cent this week to US$8,003.60 even as Arthur Hayes - the crypto exchange executive whose firm rented the Lamborghinis - predicted a surge to US$50,000 by year-end.
This week's slump is far from extreme by crypto standards, but the market's resistance to Blockchain Week's ballyhoo highlights one of the chief concerns among virtual currency pessimists: that most people who are going to purchase the coins have already bought in after last year's epic surge.
While bulls point to a vast pool of pent-up demand from professional money managers, it's far from clear whether regulations in the US and elsewhere will evolve in ways that encourage institutional investors to jump in.
Many Wall Street pros have dismissed the market as a speculative bubble, while Warren Buffett likened bitcoin to "rat poison squared".
For Sunny Lu, the chief executive officer of blockchain-based logistics company VeChain Tech and one of the conference speakers, this week's losses may have been the result of unmet expectations over the quality of presentations at Consensus 2018.
"The quality of projects and speakers were not really as good as expected," Mr Lu said. "I guess people just got disappointed." BLOOMBERG