News

Crypto wealth sinks $57 billion as bitcoin bros party with Snoop Dogg

So much for the Blockchain Week bounce. With thousands of cryptocurrency diehards swarming into Manhattan for this week’s Consensus 2018 conference and other industry related events, the prediction from bitcoin bulls was that the hype-filled 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 $US45 billion ($56.6 billion) since May 11.

Even a cool event featuring rapper Snoop Dogg couldn't revive bitcoin's fortunes.

Even a cool event featuring rapper Snoop Dogg couldn’t revive bitcoin’s fortunes.

Bitcoin, the most popular of the bunch, dropped 3.7 per cent this week to $US8,117.43 even as Arthur Hayes — the crypto exchange executive whose firm rented the Lamborghinis — predicted a surge to $US50,000 by year-end.

“While there was not a consensus bump, our conviction on cryptocurrencies strengthened during the conference,” Lee wrote in a note on Friday. He cited over exuberance about the prospects for rising institutional demand and lingering concerns about the regulatory framework for depressing prices.

‘Rat poison squared’

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 arguments often used by virtual currency pessimists — that most people who are willing to buy the coins have already piled in.

While bulls point to a vast pool of pent-up demand from professional money managers, it’s far from clear that regulations in the US and elsewhere will evolve in ways that attract institutional investors. Many Wall Street pros have dismissed the market as a speculative bubble, while Warren Buffett has likened bitcoin to “rat poison squared.”

This week’s losses may have been the result of unmet expectations surrounding Consensus 2018, said Sunny Lu, the chief executive officer of blockchain-based logistics company VeChain Tech and one of the conference speakers.

“The quality of projects and speakers were not really as good as expected,” Lu said. “I guess people just got disappointed.”

Related Articles