[skybrian]

There is no conservation rule saying that financial assets can never disappear. They don't have to go anywhere.

Financial assets can disappear from a balance sheet when it becomes clear they will never be paid. That's what happens when a debt is written off. Similarly when stock drops and is marked to market.

These assets are essentially predictions of future income. Sometimes that income never materializes. The promise was broken or the prediction was over-optimistic. People discover they're not as rich as they thought.

For a cryptocurrency, the only expected future income is from other people buying when you sell. If other people aren't there to buy at the price you expected, your prediction is just wrong.