You're reasoning would seem to imply that because the initial investment cash always ends up circulating, no value is ever destroyed. But that's obviously not how things work because value can be destroyed. Specifically, the way it works is that for example $1B is used to buy a part of the company A. $1B is then put to use and starts circulating (but also not entirely - it does indeed just largely sit in a bank account because it's hard to spend $1B that quickly).

Let's say this investment then raises the market cap of the company that was invested in by $5-10B. Loans are then taken out against that $5-10B of increased market cap. If the growth never materializes, then the investment ends up underwater and there's secondary effects that make the loan worth less than what was given; this is what the credit worthiness is supposed to measure, but with hyperinflated values and lots of money as collateral these loans are given great rates. Basically what ends up happening is extra virtual currency starts circulating mirroring the increased market cap due to that initial $1B investment. But if the return on investment doesn't materialize, this $5-10B of currency just vanishes into thin air and dwarfs the original $1B investment. Additionally, there's leveraged secondary and tertiary bets that get taken out that further magnify this circulating currency and magnifies the loss if things don't work out.

This is precisely what happened in the dot com and banking crises bubbles. These things have secondary parasitic effects that are ballooned through leveraged investments into affecting the broader worldwide economy and crossing industries and whatnot.