It’s official. This week the crash of cryptocurrencies in now greater than the crash in high technology shares after the dot-com bubble at the beginning of 2000. On Wednesday the MVIS CryptoCompare Digital Assets 10 Index had fallen by 80 per cent from its high in February this year. The Nasdaq index of high tech US shares fell by 78 per cent from its peak in March 2000 to its trough in 2002.

I’m grateful to Bloomberg for pointing out the parallel, and it makes a change from comparisons with the Dutch tulip mania in 1637, or the South Sea Bubble of 1720. It also carries a real warning. The collapse of the dot-com boom was followed by a US recession (the UK just avoided one), while the easy money policy that helped to pull the US out of that recession helped create conditions for the much bigger crash in 2008.

But you have to be careful when drawing comparisons, for what happened in the past can be a false friend. For a start, cryptocurrencies are tiny by comparison to high-tech companies in America. The value of the cryptocurrencies at their peak this year was $831bn. The value of the companies on Nasdaq at its peak in 2000 was $6,600bn. Allow for inflation and you can see that the wealth lost in the dot-com crash was ten times as big. Incidentally, Nasdaq market capitalisation now is $15,370bn, and the value of cryptocurrencies $186bn.

Business news: In pictures Show all 13 1 /13 Business news: In pictures Business news: In pictures Flybe collapses Airline Flybe has collapsed. All future flights on the Exeter-based airline have been cancelled – leaving more than 2,300 staff facing an uncertain future, and wrecking the travel plans of hundreds of thousands of passengers. The chief executive, Mark Anderson, said: “Europe’s largest independent regional airline has been unable to overcome significant funding challenges to its business. AFP via Getty Business news: In pictures Future product placement will be 'tailored to individual viewers' Marketing executives say that product placement in films and televison shows on streaming services such as Netflix may be tailored to individuals in future. For instance, if data shows that a viewer is a fan of pepsi, a billboard in the background of a shot would host an advert for pepsi, while for a viewer known to have different tastes it could be for Coca-Cola Paramount Business news: In pictures Corbyn wishes Amazon a happy birthday In a card sent to Amazon CEO Jeff Bezos on the company's 25th birthday, Labour leader Jeremy Corbyn writes: "You owe the British people millions in taxes that pay for the public services that we all rely on. Please pay your fair share" Business news: In pictures No deal, no tariffs The government has announced that it would slash almost all tariffs in the event of a no-deal Brexit. Notable exceptions include cars and meat, which will see tariffs in place to protect British farmers Getty Business news: In pictures Fingerprint payment NatWest is trialling a new bank card that will allow people to touch their hand to the card when paying rather than typing in a PIN number. The card will work by recognising the user's fingerprint NatWest/PA Wire Business news: In pictures Mahabis bust High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019 Mahabis Business news: In pictures Costa Cola Coca-Cola has paid £3.9bn for Costa Coffee. A cafe chain is a new venture for the global soft drinks giant PA Business news: In pictures RIP Payday Loans A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain's biggest, went into administration on August 30 PA Business news: In pictures Musk irks investors and directors Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks Getty Business news: In pictures Jaguar warning Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a "bad" Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks AFP/Getty Business news: In pictures Spotif-IPO Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn't issuing shares, but rather, shares held by Spotify's private investors will be sold AFP/Getty Business news: In pictures French blue passports The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July. The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process. Business news: In pictures Beast from the east economic impact The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.

That leads to the next point, whether cryptocurrencies at some stage will recover and maybe surge ahead in value and importance. After all, a lot of people lost money in the dot-com crash, but the technologies associated with it changed the world. Here, my instinct is that they won’t recover to any significant extent because they don’t fulfill the classic functions of money.

In order to make a comparison with their performance and that of Nasdaq, I had to convert their value into dollars, rather than converting Nasdaq’s value into, say, bitcoin. So they were not able to perform the first role of a currency, being a unit of account – a unit that enables you to compare different prices against each other. Its own value changes too much.

They do to some extent act as a medium of exchange, the second classic thing a currency is used for. A Rolls-Royce dealership in Houston, Texas, has just announced that it will sell you a new one for Bitcoin – 55 of them reportedly, though if Bitcoin keeps falling, they might want a few more. I suspect, since its outgoings are in dollars, it would convert the bitcoin into dollars pronto. Actually the various cryptocurrencies are used for some trading, stuff such as software and the like, but it is quite limited.

As for the third function, a store of value, they are clearly very bad ones. On my quick tally the only currency in the world this year that has performed worse than bitcoin (which accounts for 55 per cent of all of them by value) is the Venezuelan bolívar.

But they are a significant asset class, and they are useful to some people who don’t want to have their transactions traced. It would be unfair to say that they are the currency of choice for criminals, just as it is unfair to say that people who chose to be paid in cash are drug dealers or tax evaders. But in a world where our every movement and just about every action is tracked, it is certainly a bit of a relief to be able to stay under the radar.

CEO Financial Conduct Authority: 'If you want to invest in bitcoin be prepared to lose all your money'

This concept of them as an asset class fits in with the new survey of financial executives by Forbes magazine, where 70 per cent believe they are here to stay. Gradually legislation will catch up, as it always takes time for the legal and regulatory systems to adapt to any new technology. Thus the US Securities and Exchange Commission thinks some tokens might be considered securities, which would bring them under government jurisdiction.

The Winklevoss twins, famous for their roles in the 2010 film about Facebook, The Social Network, have just got regulatory approval for a new cryptocurrency, the “Gemini dollar”, to be pegged to the US dollar. That would certainly get rid of the volatility issue, and pegging to the dollar is a device periodically used by Latin American countries to try to give stability to their own currencies. But I can’t quite see the advantage: why not just use dollars?