Loading ...His main assertion is that a lot of money was made in the early days of Bitcoin and then a lot was lost in the past year. He calls this “first mover advantage” – just like those who cashed out of the Madoff fraud had first mover advantage. First mover advantage used to be an industrial term, but in today’s fucked up lexicon it’s applied to Ponzi schemes instead. Regardless, he’s only right on a relative percentage basis. On an overall absolute dollar basis and in terms of the number of people affected, very little was made in the early days, and half a trillion was wiped out in the past year.
Below is the combined crypto market cap. Roughly~$20 billion in market cap was accrued during the first nine years of Bitcoin existence when it was a relative novelty. Once it became a mainstream fad, crypto bolted to $750 billion prior to crashing in a matter of months. The amount of money lost in the past year is orders of magnitude greater than the amount of money made during the first nine years.
This is what Prechter explains over and over again, but relatively few people seem to understand. Markets are valued by the marginal transaction. Even if only one person sells, the value of ALL Bitcoins is reduced. The vast majority of money flowed into crypto during the past year, and most of it never made it out. It was merely “revalued”. =