The actual market value of crypto is vastly smaller than its purported market cap

Since Friday, the market cap on crypto has fallen by $100 billion.

In that time, we saw $600 million in liquidations.

Or, to put it another way - for every $1,000 that the total market cap dropped during the sell-off, only $6 of real money was extracted.

When an asset is overvalued, when it is liquidated, you will generally get much, much less value out of it than its purported price. However, this ratio would suggest that the amount of actual value in that $100 billion was only about 0.6% of its face value.

How does this compare to real markets?

During the Great Recession, the net worth of households in the US declined from $69 trillion to $55 trillion - about $14 trillion of fake value, out of $69 trillion. Or another way to put it was that about 20% of the value was nothing more than a speculatory bubble.

Crypto markets, since the peak, have so far crashed from $3,000 billion ($3 trillion) to $800 billion.

In that time, total liquidations have been on the scales of billions of dollars - which is a lot, but when we're talking a loss of $2.2 trillion, and liquidations on the scale of $15 billion, that would suggest that less than 1% of the purported value of the market has been real, extractable money, and would suggest that the total value in crypto, rather than $3 trillion, was on the order of tens of billions of dollars.

A naive analysis of this would suggest that the total real value in crypto markets was not $3 trillion, but more like $20 billion, and that about $5 billion is left in extractable value before the market completely collapses and dies.

This may or may not be correct; there's likely some pool of real assets owned by the big stablecoin backers outside of crypto markets in the form of stocks, bonds, commercial papers, USD reserves, etc. which serves as the "real value" of crypto. However, these companies may also have significant debts to investors, and it isn't clear what percentage of their assets are tied up in crypto assets; their net worth may well be below $0.

Tether/Binfinex's net value is definitely less than $0 at this point, but we should be suspicious of USDC as well; its value is only attested to, and the value of whatever assets it has have likely at least somewhat declined, though they have previously claimed that over 60% of what they had was in stuff that pretty much can't fall (either USD or things like US Treasury Bonds) but that was back when the market cap for USDC was less than half of what it is today, and they changed the wording on their website by June 2021 away from saying that they were fully backed by USD.

It's not clear how much extractible money is actually left in the crypto markets, or what percentage of that $800 billion market cap is real, but there's no way it's anywhere near $800 billion, and is likely less than $100 billion. The worst case scenario could be less than $10 billion.