As Expected: Cryptocurrencies Evaporate

Jul. 10, 2018 3:43 PM ETBTC-USD, ETH-USD, LTC-USD12 Comments3 Likes
George Putnam profile picture
George Putnam
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Summary

  • This article was written by Bruce Kaser, head of equity research for New Generation Research, publisher of George Putnam III’s The Turnaround Letter.
  • It has been a tough year for Bitcoin as its price has fallen 65% from the December 2017 highs.
  • Other cryptocurrencies haven’t been as fortunate, with many becoming worthless.
  • In the December 2017 issue of The Turnaround Letter we shared our view that cryptocurrencies were a fad not unlike the internet bubble of 18 years ago.

It’s been a tough year for cryptocurrencies. From its frothy peak price of $19,205 in mid-December 2017, the price of one Bitcoin has collapsed over 65% to about $6,560. Other variants haven’t been so lucky: according to several websites that track them, as many as 800 to 1,000 cryptocurrencies have become effectively worth zero.

In our December 2017 issue of The Turnaround Letter, we shared with subscribers our views on the surge in investor enthusiasm: “…much of the cryptocurrency frenzy reminds us of the internet bubble of 18 years ago.”

As for the fate of most cryptocurrencies, it seems they have followed the path of similar fads. Our prognosis of “Just as most dot-coms were wiped out, we believe most cryptocurrencies will eventually become worthless” appears to be playing out.

A recent Bloomberg article (“Bitcoin Bloodbath Nears Dot-Com Levels as Many Tokens Go To Zero”) describes the current situation well.

Our December article on Bitcoin was a step-out for us as we focus almost exclusively on individual, out of favor stocks with real value and solid turnaround potential. The cryptocurrency bubble caught our eye as something exactly the opposite.

This article was written by

George Putnam profile picture
1.3K Followers
A graduate of both Harvard Law School and Harvard Business School, George Putnam, III first became involved with distressed securities as a lawyer in the late 1970s. Seeing the inefficient niche that bankruptcies and turnarounds were presented and researched, he founded New Generation Research, Inc. and began publishing The Turnaround Letter in 1986. Since then he has frequently been quoted in Barron's, The Wall Street Journal, New York Times, USA Today and other financial publications. In 1990, he was named investment advisor of the year by USA Today. In addition to his responsibilities at New Generation Research, Inc., Mr. Putnam also serves as a trustee for The Putnam Companies, a mutual fund group with over $100 billion in assets.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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