The Expert Podcast

So where did all the cryptocurrency go? Bitcoin is down under 20,000, some other crypto platforms are actually at zero or at least have locked down their company not allowing any kind of redemption or withdrawals. Where'd all the money go? You might think that did it disappear, did somebody take it? Well here's how that works. If let's say cryptocurrency was trading at let's say 50,000 - a bitcoin I'm sorry was trading at 50,000 - and it goes down to 20,000, well that 30,000 wasn't real money. It just meant that on that day that it was trading at 50,000 somebody was willing to pay 50,000 for and that's what they paid.

That person who paid 50, that money's out of their pocket and into and purchased that bitcoin from another person. That person now has the 50,000. That's where the money went. It went to the person who sold it at 50. Now when it goes down to 20 the money didn't doesn't have to go anywhere - it already went somewhere. All the money that went into crypto came out of people's pockets and went into bitcoin or the other platforms at the time of purchase. The money's already gone. Doesn't go anywhere when it goes down. The money's already gone. It just means that whoever sold it at 50,000 has the 50,000 now. They have it. That's where it went. It went to the sellers that sold it at the high values.

What about the markets that shut down or the markets that are frozen or they don't allow withdrawals? Where did that money go? Same place. Whatever money you put in, if you bought a certain bitcoin for let's say or a certain cryptocurrency for six thousand and now that market is shut down to zero, the six thousand went to whoever sold it for six thousand, right? The money doesn't go anywhere when the price drops. The money went somewhere when you bought it and whoever sold it, they're the ones who have the money because they sold the asset. At that point your money was gone the day you invested in it. That's where it went. Now if it's down to zero that just means that nobody's willing to pay anything for your asset. It has diminished in value to zero.

It's kind of like if you bought a brand new car for fifty thousand dollars and you drove it off the lot and two years later it's worth thirty thousand dollars. Where did the twenty thousand go? Didn't go anywhere. The 50,000 you paid went to the dealership, into the manufacturer. The 20,000 to drop was just a reduction in value related to what somebody's willing to buy for.

Now there are some of these crypto platforms that were pure fraud and NFTs, some of them were you know more organized, but either way it doesn't change the fact that unless the item that you purchase has intrinsic value like a bar of gold has value - you can use it for something - if your bitcoin or your cryptocurrency has no intrinsic value, the money's gone when you the day that you put it into the platform. You just got the hope that some other money is going to come back to replenish it to set to buy it from you when you want to sell it.