- Cryptocurrency investment peaked in November 2021
- But cryptocurrencies are now almost back to those levels. And it's not just Bitcoin.
- It's difficult to explain why cryptocurrencies are making a comeback, which means they could easily disappear again.
It's April 2024. Sam Bankman Fried is going to prison for decades. No one wants to hear about your Web3 startup or your NFT collection. Miami is over.
And cryptocurrencies are as hot as ever.
How is that?
Let me be more specific: There is not a great deal of obvious interest among people promoting cryptocurrencies as the cornerstone of technologies that will reorder the world. But there is a lot of clear interest in buying cryptocurrencies.
As of this week, the global cryptocurrency market is worth nearly $2.5 trillion, according to CoinMarketCap. This is close to its peak of $2.7 trillion, which it reached in November 2021, a year before the FTX collapse.
Between these two peaks, the cryptocurrency market collapsed, falling to around $850 billion.
To be clear: It's not just about Bitcoin, which has had a nice resurgence. Ethereum's market capitalization is approaching its pre-crash high. Investors have poured a record amount of money into Solana and Tether. (Although Dogecoin, Elon Musk's favorite coin, is still well below its peak in the spring of 2021 when Musk went on Saturday Night Live and called it a “hustle,” I bought 15 shares. I'm still down 72 shares .%.)
so why?
You can read many rationales about the renewed interest in cryptocurrencies — sometimes it's about institutions getting into coins via exchange-traded funds, and sometimes it's about what regulators like SEC Chairman Gary Gensler will or won't do about it. Cryptocurrencies. I'm sure there are people who will tell you, with a straight face, that technical analysis can explain all of this.
But to me, this shows two things: People are always willing to invest in something today because it went up yesterday — until it doesn't. And maybe you should check your Robinhood app and take another look at those coins you bought two years ago.
