It has been a hard year for crypto-currencies, especially once you look beyond bitcoin. Since June 30, bitcoin is down 1.7%, but as Paul Vigna writes in The Wall Street Journal, “Ether, the second most-valuable cryptocurrency behind bitcoin, is down 53% since June 30, while XRP, also called ripple, is down 43%. Bitcoin Cash is down 37%, and EOS is down 38%.”
Over the years I’ve spent time talking to you on this site about the dangers and drawbacks of crypto-currencies. Here’s a brief sample of what I have written in the past:
- Can Crypto-Currencies Ever be Safe?
- Steve Forbes: Here’s Why Cryptocurrencies Aren’t Money
- Crypto Volatility Hurts
- How Will Americans Pay Tax on Their Crypto-Currencies?
- Can Bitcoin Ever Really Be a Currency?
As the summer winds down, it seems that some of the air is coming out of the crypto-currency market. Vigna writes:
Many “crypto tourists” who bought bitcoin and other tokens in 2017 when prices were soaring lost faith in the transformative potential of digital currency, said Dan McArdle, co-founder of cryptocurrency research firm Messari.
“We’re just in one of those periods where the hype has died down,” he said.
Take ether, the in-house currency for the Ethereum network. The project took bitcoin’s core concepts and adapted them to a platform built to support apps, similar to Alphabet Inc.’s Android operating system.
The value of ether soared from $8 in January 2017 to $1,400 by January 2018 as investors sought to profit on Ethereum’s potential. Yet there is still little commercial activity two years after its launch.
There are about 900 live “dapps” — or, decentralized apps — on the Ethereum network with several hundred more in development, according to data from the website State of the Dapps. But there are only 9,000 daily active users.
That isn’t a lot of activity and helps explain the huge fall in value ether has experienced. At its height, ether was worth $133 billion. Today it is worth around $19 billion.
That’s not good news for crypto investors. Is the low number of active users a sign that crypto-boredom has set in? Read more from Vigna here.
