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]
The Mirage of Market Cap
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.
Paper Gains, Paper Losses
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.
The Psychology of Vanishing Wealth
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]
Cashing Out vs. Holding On
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.
The Bigger Picture
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.
Why It Matters
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.
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But you might want to have a towel handy just in case. ↩
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Especially if we’re talking about something on Hive Engine. ↩
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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. ↩
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Evolution didn’t prepare us for candlesticks. ↩
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By “house” here I mean gravity, entropy, and the slow realization that you should’ve sold at least something on the way up. ↩
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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. ↩
❦
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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. |
Silver is a great comparison as well it’s manipulated with paper contracts daily
Is that why the price fell?
I hold onto to Hive (I believe I'm in a distinct minority) for a number of reasons. Best one is I like blogging here. I wish that was enough for more people. It gets awfully quiet when the price falls, and that's kind of sad, but there's always somebody around.
Plus, Hive is potential. It might turn a profit. My husband and I have a few modestly valued numismatic coins at home. That's not a great bet either, but we don't intend to sell. We're holding onto potential. Maybe not very clever of us, but it is satisfying.
Also...most important. Hive is an ecosystem that helps some people pay for small expenses. I'm aware of that when the price falls. That's a real thing to them.
I like your perspective. What's my house worth? It's worth what someone is willing to pay for it. The money is not in my pocket, until it's in my pocket.
Exactly right man. People don't understand how this stuff works. All House of card nonsense
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What a bloodbath out there. Time to buy the dip I guess but where's the bottom? !PIZZA !LOLZ
Seems the FUD game is still very active out there!
Needed this reminder somehow as its something I've realized but often forget in the heat of the experiences playing out, either market going up or down. It's all just a mirage of sorts but albeit very influential on human behaviour.
I think striking that balance between seeing it for what it is but also acting a bit like it is real, in order to play the game better, is a hard balance to strike. This is even more true in terms of holding or taking profits, too.
Very interesting read!
$PIZZA slices delivered:
@day1001(2/10) tipped @dbooster
Come get MOONed!
Many people don't understand the very simple reality of finance, wealth appears to evaporate overnight when in reality nothing of the sort really has happened. When stock or crypto go up in value wealth is created out of nowhere by that thinking, but really isn't. For those of us who are seasoned investors we know better, but writers can get more attention pointing to doom and gloom than the explain the reality.
I agree, always take profits, and you can always buy back in with them if you want to if the time is right. Or not... But you're right, in the end the house always wins just like banks always make money!