Wolf Street CEO Says Small Crypto Altcoins Need to be Eliminated in Mop-Up Operation
Smaller Crypto Coins Need to be Eliminated Says a Financial Analyst
Wolf Street Corporation CEO, Wolf Richter, published a post in his blog where he noted the hyperinflation of the crypto market. He remarked that there were over 1,900 cryptocurrencies on CoinMarketCap.com, which represented over 500 new tokens since the start of the year. He added that that kind of hyperinflation and dilution was worse than even the poorly performing fiat currencies.
Common Selling Point: Decentralization
The popular selling point behind most crypto projects is the fact that they are decentralized. Richter said that the marketing language used in most whitepapers was intelligent-sounding words and baseless propaganda. Celebrities and online crypto trolls also got the brunt of the criticism as they are mostly being paid to promote dubious blockchain projects and ICOs. Richter believes that the cryptocurrency market was a joke where people lose significant amounts of money through making ill-advised and risky investments.
Investors Feeling the Pain
As the prices of most cryptocurrencies continue declining sharply, many investors are feeling the pain of massive losses. For instance, most of the top crypto coins, excluding bitcoin, have plunged by up to 80% over the past year. The market cap of the crypto world soared past 800 billion dollars in January and later plummeted to under 200 billion dollars in eight months. The MBA holder said that these losses were felt all over the world.
While remarking on Ripple’s 92% price drop from its $3.79 rate in January, Richter wondered why people were still keen on buying cryptocurrencies. He added that everyone should have sold their coins both during and also immediately after the price spiked. However, he also noted that it was increasingly becoming impossible for investors to unload large positions due to the considerably low trading volumes. If you attempted dumping a crypto load, then the price collapses further, which was evident when bitcoin prices dropped by $400 after a whale transferred over $100 million BTC to different exchanges.
Clean up Operation
After studying the crypto market, Richter further added that most of the crypto coins had lost their value. The result is that trading volumes for most of these cryptocurrencies have also gone down. Much of the generated wealth has already been removed from the crypto field or transferred to banks. Richter believes that the only step remaining was to do a thorough clean-up operation to rid the market of all the poorly performing coins.
Richter is not the only financial analyst to criticize cryptocurrencies. Renowned economist and professor, Nouriel Roubini also criticized the crypto market heavily. Roubini, the respected economist, mentioned that cryptos had utterly collapsed since they cannot work as efficiently as regular cash. The view was also shared by Goldman Sachs, who claims that digital currencies don’t retain their value.