
Blockchain Stocks Collapse by 40% to 90% - SQL2219
https://wolfstreet.com/2018/01/25/the-40-to-90-collapse-of-blockchain-stocks/
======
dmix
The other article they linked to is fascinating:

> UBI Blockchain didn’t do an IPO. Instead, in October 2016, it acquired a
> publicly traded shell company registered in Las Vegas, called “JA Energy.”
> It then changed the name and ticker symbol to what they’re now.

> Over the six trading days starting on December 11, 2017, its shares soared
> over 1,100%, from $7.20 to $87 on December 18, as the word “blockchain” in
> its name and sufficient hype and speculator-idiocy took hold. By December
> 21, shares had plunged 67% to $29. They closed on Wednesday at $38.50. At
> this price, it still has a ludicrous market cap of $3.64 billion.

[https://wolfstreet.com/2017/12/28/im-in-awe-of-how-far-
the-s...](https://wolfstreet.com/2017/12/28/im-in-awe-of-how-far-the-scams-
stupidity-around-blockchain-stocks-are-going/)

SEC froze their stock temporarily and it's down to $9 now.

[https://www.google.ca/search?q=OTCMKTS:UBIA&tbm=fin&gws_rd=s...](https://www.google.ca/search?q=OTCMKTS:UBIA&tbm=fin&gws_rd=ssl#gws_rd=ssl&scso=uid_N4FqWr_9O4zajwSFsZf4CA_5:0)

^ Viewing their stock price graph by "1 year" is quite interesting.

Oh and the CEO + 5 other individuals were trying to sell a ton of stock
without investing anything back into the company, not sure if they managed to
or not...

~~~
analyst74
Is this actually legal?

~~~
snuxoll
Reverse mergers happen all the time for this very reason.

------
dahdum
What's notable but not stated in this article, is that the "collapse" is from
peak, almost all are still way up from before their announcement.

~~~
throwaway5752
A 40-90% retrenchment is terrible. How much demand is from short covering? Is
there any indication they are done falling? To not be all rhetorical, I'd say
they are not done.

~~~
Theodores
They are not done because the crypto-crowd do this 'hold on for dear life'
thing and HODL their useless little coin things rather than sell them. They
tell themselves that it is only by selling that they are losing and that these
things will naturally float upwards over a matter of time, they just have to
not lose their nerve.

Even the worst coin bobs upwards slightly from time to time, so people will
sadly be 'buying the dip' and HODLing - to use their own parlance.

The crypto craze reminds me of the London riots in an odd way, people know
that this is not normal and that order will be resumed eventually. People then
went to great lengths to loot things they could never fence or want for
themselves.

The craze is also quite funny because none of these people that are turning up
now to buy coin have any faith in the regular banks and city, they have taken
the Koolaid and they love it. What happens to capitalism as we know it when
everyone takes their dollars and buys these unregulated monopoly money tokens,
to disregard normal money as 'worthless fiat'? It is comical, in the same vein
as the London Riots of 2011.

~~~
michaelchisari
Like anything that reaches popular adoption, the ideologues are always an
extreme minority. The majority are always people who are in it for themselves,
not out of some philosophical purpose. So when it hits the fan, the HODL types
are not going to be able to hodl back the inevitable.

It's something I've considered in terms of all economic and political
movements. If your movement requires ideological cohesiveness to survive,
that's not going to be enough. There has to be an advantage to participation
that goes beyond philosophical agreements and extends deeply into the material
world. If that material benefit fails to (ahem) materialize, then ideology
gives way to practicality.

~~~
jondubois
I would argue that the current western capitalist system is ideological.

An anarchist system controlled by a minority of violent mafia gangs would be
simpler and more economically efficient... The reason why the world is not
like this is simply because most people are willing to make personal
sacrifices to prevent it.

A society made up of people who only act for their own self-interest will
inevitably be an anarchist society.

If idealism has held together innefficient systems like capitalism, socialism
and organised religion for so long, surely it can hold together other systems
like cryptocurrencies.

~~~
fallingfrog
I think you're misusing the term "anarchist". Anarchy is to hierarchy what
atheism is to theism. It means nobody uses coercive force on anybody else, it
doesn't mean people don't work together. There are a few anarchist communes in
the US; the people living there carry out construction projects and so forth,
so they do work together on things that are mutually beneficial, it's just
that they do it without any specific person being in charge.

~~~
jondubois
Members of a mafia also work together. In a society without any absolute
centralised power, mafia groups are free to dominate because they'll have the
means of enforcing their views whenever disagreements come up. In a society
without any centralised power, violence becomes a very effective tool to gain
leverage over your adversaries.

~~~
fallingfrog
Violence _is_ coercive power. So not anarchist by definition.

------
adventured
It's pretty incredible how much further some of these junk stocks have to go
(down) yet.

RIOT, the failed biotech company, is still at $17.91, up from ~$4 before the
naming fraud began.

Their big news consists of winning a whopping 500 bitcoins in a US Marshals
Service auction.

Overstock (missing from the article) is still up at $74. The stock traded at
something more commonly around $15 to $20 for years prior to the manic
pumping. Pull back and look at their five year chart, that spike is how much
they have to give back yet. It's all fake value they'll be entirely unable to
support with business fundamentals. As the quarters roll by and their actual
business sees zero benefit, it'll wilt accordingly.

These junk stocks have managed to be even more pathetic than the worst of the
dotcoms in 1999/2000\. Not an easy task.

~~~
riku_iki
> It's all fake value they'll be entirely unable to support with business
> fundamentals

Why is that? Their financials look very solid:
[https://finance.google.com/finance?q=NASDAQ%3AOSTK&fstype=ii...](https://finance.google.com/finance?q=NASDAQ%3AOSTK&fstype=ii&ei=IIRqWuCyOMzKjAGSkoP4CQ)

------
AznHisoka
Yet for almost all of them, it is not very profitable to buy put options
because of how thin the volume is, and how high a premium you have to pay.

~~~
paultopia
Is there some way to put together some kind of blockchain index? Like, a
derivative with all of these blockchain companies underlying? _And then short
the piss out of that_?

~~~
analyst74
You can only short when someone else is willing to lend you their share. I
checked a few of the blockchain renamed stocks, and couldn't find shares to
short.

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abandonliberty
.... does that mean I can buy a video card again soon?

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jorblumesea
Can we just be honest and note that crypto is basically the penny stocks of
the 21st century? Their real world price is completely disconnected from the
utility gained from them.

~~~
dna_polymerase
You mentioned it: The price is completely disconnected form the utility gained
from them. With penny stocks you actually had a share in the company. And with
that comes rights. The tokens deployed grant none of these rights. So no, they
are not the penny stocks of our time, they are worse.

~~~
txsh
I believe some of the people in this thread are talking about tokens and some
are talking about coins.

~~~
xapata
Are they not the same?

------
readhn
i knew it would collapse soon since every comment i post (RIP Bitcoin) ...
would give me negative ratings last few months.

-4 points by readhn 38 days ago | parent [-] | on: Bitcoin Climbs as Futures Debut Fails to Incite At...

What goes up must come down. What goes up fast and hard usually falls faster
and harder. Market 101.

by readhn 83 days ago | parent [-] | on: Ask HN: Why is Bitcoin rising but
ethereum remaini...

Getting my pop corn ready for first at least a 50% hair cut on BTC value.

-4 points by readhn 119 days ago | parent [-] | on: Bitcoin blow as fund drops U.S. exchange applicati...

RIP bitcoin. Current valuation is $4142.99 higher than it should be.. Im
thinking we will get there within a couple of years. $1-2 seems about right
per 1 BTC.

