The headlines scream: “$170,000,000,000 wiped out from crypto in 24 hours.”
It sounds catastrophic. A hundred and seventy billion gone. Poof! But here’s the thing: that money never really existed.
It’s all “market cap,” which is just math. Take the last price someone was willing to pay for a coin, multiply by the total number of coins in circulation, and voilà: you have a market cap. When the price drops, the calculation shrinks. Just like that, billions vanish.
No one pulled $170 billion in cash out of their wallets yesterday. It’s just numbers on a screen moving around. Until someone sells and cashes out, that “value” is only paper value. It rises and falls like a mirage.
In other words, it’s not real!
We all detest media hyperbole, but at this point that kind of exaggeration is so ingrained in us, that we all do it. Most of Twitter is this.
So take a deep breath, calm down, and realize none of this is real. There is nothing to panic about.[1]
Market cap makes for good headlines because the number is huge. Bigger numbers, bigger drama. But it’s misleading.
If you own ten tokens of something, and the last trade happened at $10, people say you “have $100 worth.” But do you? Maybe — if you can sell them all at that price. But if the order book is thin, the second you try to sell your ten tokens, the price drops, and suddenly you don’t have $100. You might end up with $60, or $40, or even less, depending on liquidity.[2]
This is why whales can’t just dump everything they own at once. The more they sell, the faster the price collapses. The so-called “value” evaporates as soon as it’s tested.
Crypto isn’t alone in this. Stocks work the same way. Every time Apple’s stock moves up or down a few dollars, headlines declare “Apple gains/loses $100 billion in market cap.” Nobody imagines Tim Cook is backing a truck up to a bank vault and either filling it with cash or emptying it out.[3]
This is the same thing Warren Buffett means when he talks about “Mr. Market.” One day Mr. Market offers you a good price, another day he doesn’t. But those swings aren’t real money in your pocket unless you sell.
We love to obsess over the paper number because it makes us feel richer (or poorer) than we are. But until you hit the “sell” button, it’s just digits.
I think anyone who has been on Hive more than a few years knows this. Many of us were paper rich in the last bull run. In Splinterland cards alone, I “had” more than $200k. But I didn’t sell, so all of that value was just make believe. Same for most of us.
And yet, even though it’s not “real,” it still affects us. When the market cap of a coin crashes, people feel poorer, and they act poorer. They cut back on spending, or panic-sell at the bottom. When numbers go up, they feel flush and reckless.
This is the irony: fake money moves real behavior. A vanishing $170 billion can still trigger anxiety, sleepless nights, even depression. A sudden $170 billion pump can make people quit jobs, buy cars, or move across the country. The emotional side is real, even if the money isn’t.
Reminds me of this Monty Python clip:
I’ve felt it myself. Watching Hive rise and fall, watching Bitcoin shoot to the moon and then crash down—it pulls your gut along for the ride. Rationally, I know nothing changed in my day-to-day life. But tell that to the adrenaline spike when I see red candles.[4]
This is why “taking profits” is a mantra in crypto. Paper gains are just that — paper — until you cash some out. Of course, once you do, you’ll inevitably watch the price rise higher and kick yourself for selling. But the reverse is also true: if you never sell, those paper gains can disappear overnight. (Looking at you, Splinterlands cards…)
This is the gambler’s dilemma: hold out for more, or lock in what you’ve got. And like in gambling, the house always wins eventually.[5]
Long-term holders argue that you don’t need to cash out if your conviction is strong. That’s true… if you’re holding something you genuinely believe will survive the decades. I think we all agree HIVE will. Or we hope it will. But the reality is most coins won’t. And even with Bitcoin, the rollercoaster is brutal.
None of this is to say crypto is fake. The technology is real. The communities are real. Hive is real; I post here every day. But the numbers flashing across CoinGecko or CoinMarketCap? Those are like shadows on the wall.
The Roman poet Horace wrote parturient montes, nascetur ridiculus mus: “the mountains will labor, and a ridiculous mouse will be born.”[6] Market cap often feels like that. A giant drama over numbers that collapse into nothing when poked.
When people say “$170 billion vanished,” it suggests money was stolen, drained, or destroyed. In reality, it was never there. The calculation simply updated. Like sand castles at the beach, one wave of selling and the whole thing washes away.
So why dwell on this? Because headlines shape how outsiders view crypto. The casual reader sees “billions lost” and thinks crypto is a scam or a disaster. Insiders know it’s just volatility doing its thing.
But for us — whether we’re investors, speculators, or builders — the key is remembering: none of it is real until you’ve cashed out. Don’t let the paper number control your mood or dictate your life.
If you’re up, good. If you’re down, breathe. Either way, the number on your portfolio app is just math. What matters is what you do with it.
In the end, that’s what I remind myself on days like this:
It’s all a game. A very serious game with real consequences, sure, but still a game. And until the money is in your hand, or at least in your bank account, none of it is truly real.
But you might want to have a towel handy just in case. ↩
Especially if we’re talking about something on Hive Engine. ↩
It’s not like Cook is moonlighting as Scrooge McDuck, swimming in an Apple-logo vault. …Then again, he’s gotta be doing something with all that money. ↩
Evolution didn’t prepare us for candlesticks. ↩
By “house” here I mean gravity, entropy, and the slow realization that you should’ve sold at least something on the way up. ↩
If you’ve never read Horace before, do yourself a favor and do so. He had a great sense of humor. Or maybe that’s just me with my Gen X influenced appreciation of dry sarcasm. ↩
| David is an American teacher and translator lost in Japan, trying to capture the beauty of this country one photo at a time and searching for the perfect haiku. He blogs here and at laspina.org. Write him on Bluesky. |
