'Billions of dollars were lost at today's crypto bloodbath'. That would be a headline for an article in one of the mainstream media properties. And this would be true, not just for the crypto markets, but for any market anywhere in the world.

Do you feel pity for those people? Or should you?

Yes, there are some among them that have spent hundreds or even thousands of dollars to acquire crypto-currencies and crypto-tokens. Some of them have lost their shirts today. But truth also is that the main assets are 90-100% up compared to one year ago, even after today's bloodbath.

The actual value of crypto-assets

The main issue with most crypto-assets is that there is no underlying objective value. Obviously, for miners - who bear a real cost to produce each and every single unit - there is a subjective value: it's the cost of equipment and electricity. But buyers do not buy neither electricity, nor equipment. So, while the cost to produce e.g. a bunch of Bitcoins is objective, it is indifferent to those who buy those Bitcoins. To a buyer, a Bitcoin is worth the same, whether the miner has spent either $1,000 or $10,000 to produce it.

Is there a subjective value for a buyer? While there are several answers to this question, the bottom line is a big NO.

There is no such a thing as a crypto-investor

But you are a crypto-investor, aren't you? You placed your money to an asset, with the expectation to make a positive return. What else could you be?

It might sound weird to you, but the same 'rules' apply to the roulette, as well: someone is placing his/her money on a board, with the expectation to make a positive return. But because roulette is a game, you call this guy/gal a gambler, and yourself an investor. And this is unfair. Roulette is a game with clear and distinctive rules. And according to those rules, anyone playing that game, knows before placing a single chip on the board, not only their potential return, but also their chances to get that return, or lose all their investment.

When you buy any crypto-asset, you know next to nothing. Of course there is the technical analysis, but all charts start with an if: if it breaks the support line, the resistance line, the moving average line etc. There is no technical analysis that can claim that at the end of next day, you have 4.25% chance to double your investment. Compare that with the red/black roulette rule dictating that 'there is 48.65% chance to double your investment at the end of the round'. No ifs, no buts.

But same happens to the other financial markets, right?

Again, that depends. There are gamblers there as well, actually quite a few of them. It's the 'investors' who are looking to discover those stocks with a positive trend, or undervalued stocks.

At least for the latter, there are several metrics, other than technical analysis, that can tell whether a stock is undervalued or not. There is P/E, there is P/BV, there is even Div%. And those metrics are subjective and identical for everyone, whether buyer or seller. A gambler in the stock market looking for undervalued stocks, is making a calculated gamble. A gambler in the crypto market, is only hoping for the best.