The decline feels like more than just a price reboot or a washout. It points to a systemwide failure.
If you’re anything but a die-hard observer of the crypto markets, all the crashes, frauds, Ponzi schemes and criminal indictments that have plagued the market during the past six months have been something of a blur. Crypto is volatile, but it lives at the margins of the financial world. In the U.S., at least, traditional markets and the broader economy have never really integrated with digital currencies, and most people don’t use bitcoin or dogecoin or ethereum on a day-to-day basis, like the dollar. When bad news happens, it can feel like hearing about a coup in a country you’re only vaguely aware of. Bad for somebody, sure, but does it affect me? So when bitcoin started to crash over the weekend, then continued to fall below $23,000, its lowest point in 18 months, it might have seemed like just another point of red on the downward continuum, another “crypto winter” that, its advocates will tell you, is part of a natural cycle that strengthens and purifies the market. And maybe it is. But the crash this weekend looks like more than just a reset after things got too hot — there are signs that the system could be breaking and that the money propping it all up was less solid than it seemed. To put it bluntly: The crypto market is bleeding out. The total market for all digital currencies the world over fell below $1 trillion, according to CoinMarketCap. com — down from $3 trillion last fall and the lowest point for the whole market since February 2021. Ethereum, the second-largest cryptocurrency, is worth about a quarter of its November peak, a stunning collapse considering the network is in the middle of a highly anticipated upgrade to its systems so it won’t be so slow and energy intensive.
