In the most recent indication of peak cryptocurrency mania subsiding, a token backed by billionaire Mark Cuban dropped down to zero bucks Tuesday, joining a slew of additional hyped-up cryptocurrencies that have crashed over the past month after feverish trading drove the marketplace to meteoric price highs this past year.
A wave of panic selling Wednesday morning drove the price of Iron Titanium, a token Cuban disclosed he possessed before this week, from a Wednesday high over $64 to less than 0. 01% of a penny by Thursday morning following some of its most significant investors started selling the market at high volumes, spooking individual investors and tripping the massive selloff.
Though much more slow, the costs of other tokens sporting multi-billion-dollar market capitalizations have likewise crashed over the last month amid a broader crypto-market rout.
After agreeing to a $45 billion market cap and turning into a high 10 cryptocurrency virtually overnight last month, Internet Computer has seen its own prices tumble nearly 90%.
The token brought widespread praise from analysts and institutional shareholders, such as Polychain Capital founder Olaf Carlson-Wee, but crypto enthusiasts on Reddit have soured on the market during its dip and blamed”elites” (or institutional investors) for ditching their coins and forcing down prices.
Safemoon, yet another market lauded by the Reddit audience and social media influencers including crypto-bull Dave Portnoy, has dropped up to 70% considering amassing a $6 billion market cap in mid-May.
Shiba Inu tokens drew gigantic fanfare for their resemblance to dogecoin, the digital money backed by billionaire Elon Musk, although they once held a nearly $13 billion valuation, they have shrunk almost 75% in value since a summit on May 10.
According to crypto-data site CoinMarketCap, roughly one-third of the planet’s 100 most valuable cryptocurrencies have plummeted at 40% within the past month, and a dozen have crashed more than 50%. Only three have added worth: Quant, Theta Fuel and Amp–small tokens (subject to intense volatility) worth $916 million, $2.8 billion and $4.2 billion, respectively.
“I got hit like everyone else. Crazy part is I got out… [Then] Bam,” Cuban tweeted late Wednesday about Iron Titanium’s crash. The falling prices exposed a flaw in the market’s design that generated an arbitrage opportunity, effectively enabling investors to earn unlimited money by purchasing and selling the token, which drove prices down further. “It was a crypto vortex of money,” Fred Schebesta, the creator of fintech company Founder and an Iron Finance investor, advised Coindesk. “What happened is just the worst thing that could possibly happen considering their tokenomics.” Reddit dealers also have blamed lackluster designs for its falling prices of Safemoon, Shiba Inu and other previously lauded tokens, although their crashes have been much less intense.
Established cryptocurrencies bitcoin and ether have fought over the past month amid regulatory concerns and peaking investor opinion, but their costs have fared better than most of the smaller counterparts. Bitcoin is down 11% over the past month, whilst ether has dropped about 28%. When the crypto market peaked in May, Oanda Senior Market Analyst Edward Moya mentioned traders were piling into altcoins–or bitcoin alternatives–in a indication of growing speculation. Trading volume soared at the moment, consistently totaling more than $300 billion each day. Mania has since cooled, down to less than a third of its peak.
$1.6 trillion. That is the value of this cryptocurrency market, 63% of that is made up of bitcoin and ether.