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 latest gold market analysis – click here for a free subscription to his exclusive monthly Gold Videocast.
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

US Government Runs Biggest May Budget Deficit in History

If you were thinking federal government spending might slow down a bit after the national debt crossed the $22 trillion mark – well, it didn’t. Last month, the federal budget deficit came in at $208 billion, according to Treasury Department data. It was the largest May deficit in history. Uncle Sam spent $440 billion last […]

READ MORE →

European Alternate Payment System to Circumvent US Iran Sanctions Nearly Ready

A European payment system set up to circumvent US sanctions on Iran will be ready soon, according to German Foreign Minister Heiko Maas. This is yet another move in a global effort to minimize dependence on the US dollar.

READ MORE →

Indian Gold Demand Surged in April and May

After a dip in demand in 2018, it appears Indians are buying gold again. Anecdotal data seemed to indicate strong demand for the yellow metal in India during the Akshaya Tritiya holiday. Retailers reported sales were up by as much as 25%. As it turns out, demand was indeed strong. Gold imports into India were […]

READ MORE →

More Gold For China

China added to its official gold reserves for the sixth straight month in May as it continues efforts to minimize exposure to the dollar. The People’s Bank of China increased its gold reserves by another 15.86 tons last month, according to data released by the bank on Monday. That raises the official Chinese gold reserves […]

READ MORE →

No Pause in Central Bank Gold-Buying

Central banks bought more gold in April, according to a report by the World Gold Council. This continues a gold-buying spree that stretches back to last year. Globally, central bank net purchases of the yellow metal totaled 43 tons. That is an 8% increase month-on-month.

READ MORE →

Comments are closed.

Call Now