Earlier quoted context omitted.
> Crypto wallets changing hands is a non-event for prices. Surely the point was more: "Why doesn't the obvious risk events like this represent affect the price of the commodity?" I mean, at this point I have to believe that the likelihood of a given dollar-equivalent of crypto currencies being stolen is much, much higher that it is for literal paper money. And paper is uniformly considered too risky to use as an asse…
There will be so many small time investors losing money when the bubble pops it's starting to make me wonder if it won't lead to some serious global destablization. This isn't just some investment play-thing of otherwise well-off individuals in developed countries. A lot of dumb money has flowed in, and it's from people who probably can't really afford to lose it without taking a serious hit to their net worth. Inter…
Keep in mind that statistically speaking, you and I live in an echo chamber. Hacker News is a bubble of engineers with a penchant for business and finance (startups, the main thing here, are where geeks who also like money gravitate towards). My subjective experience in meatspace is similar to yours: a lot of people around me are involved somehow with cryptos, but I think that is likely caused by me fitting the aforementioned demographic.
I think (and surveys validate) that the general penetration in the general population is still low. Total market cap for cryptocurrencies is 500B as we speak. Actual capital involved is much less.
This is peanuts when compared to any measure of the global financial system. Most people have heard and operate by the mantra "this is crazy, don't put anything in that you are not willing to lose".
500B is a little over half what Apple alone is worth on NASDAQ. The difference being most people don't invest in Apple directly. A lot of people are probably exposed to Apple stock, but I don't think any mutual/hedge funds have significant positions in cryptocurrencies where a crash would affect the common folk.
That is very different from a subprime mortgage used to buy a house you live in. No one that I know sells during dips or crashes, because cryptos are to some extent "play money". This, I think, explains the resiliency of the market to its wild fluctuations: no one expects anything else but crazy volatility.
That being said, I am certain that cryptos will take a page in the history books. I have personally witnessed people doing and saying things that immediately make me think I should probably be working on the script for the cryptocurrency edition of The Big Short.
Source: I have a bit of skin in the game.