Crypto’s $700 billion swoon bloodies ‘electronic cash’ dream
The world’s biggest digital coin began life promising to become “electronic cash,” but bitcoin and its swarm of imitators are slipping deeper into the shadows of traditional payment services.
The funk engulfing cryptocurrencies has now sent the total value of the 100 largest tokens to around half that of Visa Inc. In January they were worth almost three times the credit card Goliath.
The collapse represents a setback to early cryptocurrency advocates, who painted them as challengers to the likes of Visa and Mastercard Inc. For some analysts, established payment systems became an aspiring benchmark for digital coins.
If there’s a need for speed, the traditional players still have the upper hand. Bitcoin’s seven to eight transactions per second compare with Visa’s more than 65,000. Meanwhile, most current bitcoin transactions now are for investment or speculation, rather than buying luxury goods or vacations with the “electronic cash” progenitor Satoshi Nakamoto envisaged.
The imperative for many investors has therefore been to make crypto transactions faster. There’s a list of luminaries providing seed money or expertise to that end, from Twitter Inc. co-founder Jack Dorsey and Tesla Inc. investor Bill Lee to Marc O’Brien, who quit as Visa UK’s CEO in 2014 to advise on electronic-money startups.
Bitcoin has plunged about 75 percent this year. The total market value of cryptocurrencies has fallen by more than 85 percent since its peak in early January, according to CoinMarketCap.com’s data for more than 2,000 of them. That’s about $718 billion.