Crypto-Mania Collapse Update: $638 Billion Gone, by Wolf Richter.

Cryptocurrencies and tokens are multiplying like rabbits: There are now 1,926 listed on CoinMarketCap.com, 500 more than early 2018. And even as the number of cryptos continues to swell, each crypto constantly creates new units through “mining.” This dilution and hyperinflation is worse than with all but the worst fiat currencies, such as the Venezuelan bolivar. …

At the peak on January 7, total market cap was $704 billion, per CoinMarketCap at the time.

But new cryptos arrive all the time, and cryptos are also multiplying themselves via the mining process. CoinMarketCap figures the market cap going backwards, based on today’s existing cryptos to arrive at a theoretical market cap at a date in the past, as if all those new cryptos and tokens had already existed on that day in the past. And by this measure, the theoretical market cap for January 7 was $830 billion.

Based on this measure, the aggregate market cap has plunged 77%, from $830 billion to $192 billion in eight months. $638 billion vanished or transferred to those who sold in time from those who didn’t.

Nonetheless, there is value in a currency that is independent of governments and that can be exchanged over the Internet. Winners will emerge eventually.