In 1929, the Dow Jones Industrial Average plummeted by about a quarter over the course of two days, ushering in the Great Depression. On Black Monday back in ’87, the Dow plummeted 22% in one day alone, presaging a brutal months-long correction that would wipe out nearly half of U.S. stock value. At the height of the 2008 financial crisis, stocks were regularly shedding 6% and 7% a day. We bring these up for comparison’s sake.
Today, a crypto-currency called Ethereum plunged 50%. Is it the beginning of the end for digital currencies? Or at least this digital currency? Don’t be ridiculous. In the world of non-fiat money, such a drop is just a little correction, especially after six months that saw the intangible stuff soar 5,000%, and a 95% flash crash a few weeks ago. Nothing to worry about.
Such “panic” selling was to be expected after the gains earlier this year, said Charles Hayter, the CEO of research site Crypto Compare. “A correction was in the cards as traders reallocate their positions and take something off the table….”
“It’s clearly a bit of panic,” said Vinny Lingham, the CEO of bitcoin startup Civic, “it was definitely overbought….”
“These markets move big when they move,” said Joseph Lubin, the CEO of ConsenSys, a Brooklyn-based shop that helps develop Ethereum-based startups.