Where did the money actually go? Are these small startups or individuals that have gone bankrupt that totalled this amount ?
In: Economics
It just unrealized gain meaning that I bought something that I thought was worth about $100, but then the perceived value start falling because no one is buying and I am trying to sell it, but people realize that maybe it is not worth that much. This item then falls to something like $60 since people are starting to buy at that value. I just “lost” $40, because I did not sell that item at $100. The money goes nowhere since now I can only sale it at $60, but if the people start buying up everything at $60 and the item’s value start climb because not enough supply to meet that demand it can go back up to $100.
It didn’t go anywhere.
It exists just on paper, in theory.
Let’s say you have a cool chair. I offer you $100 for it.
Do you have $100? No, you have a chair. A chair you COULD sell to me for $100.
But then I go buy another chair and I’m all set for chairs. Now I don’t want to buy your chair, but another guy offers you $50 for the chair, what do you have?
Still, just a chair.
You didn’t really “have” $100, and you didn’t “lose” $50. It’s just that the thing you own is now worth less on the market that it was before.
That’s all stock is. Something you can sell, for whatever someone is willing to pay. The theoretical value goes up and down, and that’s the money they are talking about.
Traders sold assets to cover their positions and yen denominated debts after the BOJ raised rates and unwound the yen carry trade
Imagine your home being worth 1 million. Now an ugly financial crash comes and now your house is worth 700k. Uve lost 300k (on paper). Thats basically the same about stock market. U never actually lost the money unless u make the transaction (realize the loss). Stocks move up and down a lot in short term. One day u might “lose” 3%,but another day “win” 10%.
I offer you $100 for your bike. It’s worth therefore $100. Oops, now I offer you $50, so now it’s worth $50. I just wiped away $50 of your net bicycle stick value.
As others have said, the money didn’t go anywhere because it wasn’t there to begin with. Let’s say you buy a pack of Magic the Gathering cards for $10 with 10 cards in it. The “real” value of each card should be $1 but one of the cards has a cool effect and people are willing to pay $10 just for that card. If you sold it today you’d get the full $10. But say in the new Magic set they print that card again but make it much more common it will be easier to find and people won’t be willing to buy it for $10 anymore. If you still have your original card you technically lost $10 in value from that card but you didn’t actually gain or lose any real money, just the idea that you could sell it for that much money.
The term “money” has many definitions. You took your cash and invested it in a stock or fund or Bond or something hoping to make more money. Now let’s say that thing you purchased goes up and you have “made” $50. Well, you only “make” that it if you are able to sell it at the higher price and it goes back into your cash account again (you’ll be paying taxes on it, but that’s a different story to tell). Now, if that thing drops by $50, you freak out, and try to cash it out, if you are able to do so, that sold price (minus fees & commissions) will be deposited back into your cash account.
Now let’s say that thing drops $50 and you don’t freak out, you just let your investment be. There’s no actual loss to you, it was just numbers going up and down. It’s not an actual win or lose until you cash out. All the rest are just numbers.
Things go up and things go down if you buy a stock at 20 and it goes down to 10 you still own the stock it’s just not worth as much, if you buy a house for $400,000 and the value goes up you gain value, if it goes down you lose value. Really what’s happening is the financial markets do fine and The working class average Joe gets screwed.
It means stonks go down.
It’s also incoherent, as it ain’t money until someone sells a stonk for money. If it’s still a stonk, it’s Monopoly money.
It is like virtual money, let’s say you have company shares each one valued at a dollar so you “have” $100, something happens and now shares are valued at 70 cents each, you still have your 100 shares but only “have” $70. The money didn’t go anywhere because you didn’t really had it. The problem is that if you originally bought those shares at a dollar each you WOULD lose money if you choose to sell them, in the future those shares could increase in value and recover or could keep going down.
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