You are comparing the market cap of cryptocurrencies to NASDAQ, a portfolio of the highest profit driving, real asset laden companies on earth. How is this even remotely realistic?
(In fairness, there's a lot of faith involved in your broker doing the trade in BP, the ADRs if applicable, the DTCC holding your actual shares, etc., but not a lot of faith required to believe that thousands of people are actually drilling useful shit out of the Earth for BP's owners.)
Something based on faith can drop all the way to zero and stay there because e.g. everyone bailed to something else and there was no reason to come back.
That's kind of my point, really. If crypto goes low enough, especially if the price is down for no good reason (i.e. it's based on a single country in the entire world cracking down on it, not because the tech stopped being useful or interesting), there will be investors who will think it's underpriced and will jump back in, which will bump the price and draw more people back in, etc etc etc. Bitcoin went through exactly this in 2013-2015. It kept dropping and dropping and dropping, all the news was terrible for it, but it never dropped to zero because there was enough people who thought it was underpriced and bought and held, waiting to see if it would go back up. And boy, if they held through last year, those people won big time.
"If everyone stopped using google tomorrow, their stock would go to zero. Investing in google is based entirely on faith."
Do you agree with this statement?
Yes, there's some faith involved in assuming that the advertising market won't change overnight or that Google won't suddenly stop being able to compete effectively but that's orders of magnitude less than the level of faith needed to justify the current valuations, especially when the argument is not just that despite being unproven cryptocurrencies are certain to become mainstream but going further to say that a specific unproven implementation is going to win.
Can I interest you in a Venezuelan bolivar fuerte. There are 30,000,000+ people vested in it. There are billions of USD worth of them out in the world. What could possibly go wrong?
Bitcoin will enable many more exchanges that weren't possible before.
Investing has nothing to do with faith, that’s called speculation. Investment is based on sound financial principals of expected future return based on debts and cash flow, where actual value is being created and added to the economy. This is mania.