> My new conspiracy theory is all of the smaller coins were an easy way to extend the Ponzi scheme by inventing valuation out of thin air.

That's exactly what happened. I invent $GRBG coin, reserve 1 billion of them, and sell 1 to my friend for $1. Boom, $1 billion "market cap".

Then you wash trade between each other, raising the price enough so the suckers start to notice, and then cash out at the top.