Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

The Cryptocurrency Graveyard

  by    0   0

It’s no secret that Bitcoin has tumbled since its meteoric rise late last year. After nearly touching the $20,000 mark, the cryptocurrency is trading at around $6,600 today. Other cryptocurrencies such as Litecoin, Ripple and Ethereum have also all shed big chunks of their value. But at least these cryptocurrencies are still alive and kicking. Hundreds have simply died.

Deadcoins.com lists over 800 cryptocurrencies that no longer exist or have a value of 1 cent or less.

As an article in Forbes points out, many of the dead coins came from failed projects that used initial coin offerings (ICOs) to raise funds. As the startups collapsed, the cryptocurrencies they issued became worthless. But failed ICOs weren’t the only source of the coin corpses now resting peacefully in the crypto graveyard. Many of the dead cryptocurrencies were scams from the get-go. Some were killed by hackers and some were never anything more than clever parodies.

“There has obviously been a lot of fraud and hype in the ICO market,” Aaron Brown, a business author and investor who writes for Bloomberg Prophets, said in an email to Forbes. “I accept figures I have seen that 80%of ICOs were frauds, and 10% lacked substance and failed shortly after raising money. Most of the remaining 10% will probably fail as well.”

According to CoinSchedule, ICOs have raised $11.75 billion in 2018 alone. But an analysis published by an ICO advisory firm reveals less than 4% of ICOs raising from $50 million to $100 million were successful or promising. As Forbes put it, “Most ICOs were raising money without having an experienced development team or an actual product, just white papers studded with promises.” Analysts say blockchain startups are faring worse than counterparts in other industries.

Of course, this should come as no surprise. We see similar busts with the advent of every new technology. It takes a lot of failure to generate every success. Think of all the fly-by-night internet companies that came and went during the dot.com bubble. Investors poured billions of dollars into plans for websites that never even went live.

Outright scams have also plagued the crypto world. Last spring, The Wall Street Journal revealed that investors forked out some $1 billion on ICOs that were full of “red flags.”  The WSJ identified 271 fraudulent coin offerings with red flags including “plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.”

Then there are the parodies. Names like BUTT-Coin, Useless Ethereum Token and JesusCoin should have been giveaways that these weren’t real cryptos, but that didn’t stop some hapless investors from slapping down a few bucks.

Crypto apologists will point out that while the dot-com graveyard is every bit as full as the crypto cemetery, we still ended up with Facebook, Amazon and Google. So, maybe we shouldn’t judge the living by the dead.

Regardless of whether you are bullish or bearish on the long-term prospects for cryptocurrencies, the crypto graveyard should serve as a warning sign and give investors pause. Does this mean you should abandon Bitcoin and other cryptocurrencies completely? That’s a decision every investor needs to grapple with.

Regardless, diversifying your cryptocurrency portfolio with precious metals can help mitigate some of the downsides and put you in an overall stronger financial position.

Just consider the old adage – you don’t want to put all of your eggs in one basket.

SchiffGold can help you convert some of your Bitcoin to gold. Call 1-888-GOLD-160 for more information.

Bitcoin buy gold from SchiffGold

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Yield Curve Inverts Flashing Recession Warning; Stocks Plunge

The yield on the 10-year Treasury fell below the yield on the 2-year for the first time in 12 years, stoking recession fears and tanking stock markets. Yield curve inversions have preceded all nine recessions since 1955.  This was the first time the 10-year Treasury yield has dropped below the 2-year yield since June 2007 […]

READ MORE →

China Adds 10 More Tons of Gold to Its Hoard

the country of china shown on a globeChina bought gold for the eighth straight month in July, adding another 10 tons to its rapidly growing hoard. The recent purchases boosted the People’s Bank of China’s gold reserves to 62.26 million ounces – about 1, 945 tons.  China has added about 94 tons of gold to its stash over the past eight months.

READ MORE →

The Fed Has the US Economy on Life Support

The Federal Reserve has the US economy on monetary life support and Daily Reckoning managing editor Brian Maher says it will never again breathe on its own. As hedge fund manager Kyle Bass put it, the economy is trapped within the inescapable tractor beam of zero percent interest rates.

READ MORE →

2019 Federal Budget Deficit Already Above 2018 Number

The federal government continues to spend America into a black hole and has already topped last year’s budget deficit with two months left in the fiscal year. The US budget deficit in July came in at $120 billion thanks to a surge in spending, according to data released by the Treasury Department. Uncle Sam spent […]

READ MORE →

Is the Mainstream Turning Bullish on Gold?

In a podcast a couple of weeks ago, Peter Schiff said we now have all the elements of a gold bull market. Well, it looks like the mainstream might be starting to catch on. A headline at Bloomberg on Friday proclaimed “Hedge Funds Go All-In on Gold.” According to the Bloomberg report, hedge funds increased […]

READ MORE →

Comments are closed.

Call Now