Tuesday, August 21, 2018

I’m ‘Financially Ruined’: Cryptocurrency Investors are Crushed by Losses of 70% or More

Bitcoin price over last 12 months.
By Nathaniel Popper and Su-Hyun Lee

 Pete Roberts of Nottingham, England, was one of the many risk-takers who threw their savings into cryptocurrencies when prices were going through the roof last winter.

Now, eight months later, the $23,000 he invested in several digital tokens is worth about $4,000, and he is clearheaded about what happened.

"I got too caught up in the fear of missing out and trying to make a quick buck," he said this week. "The losses have pretty much left me financially ruined."

Mr. Roberts, 28, has a lot of company. After the latest round of big price drops, many cryptocurrencies have given back all of the enormous gains they experienced last winter. The value of all outstanding digital tokens has fallen by about $600 billion, or 75 percent, since the peak in January, according to data from the website coinmarketcap.com.

The virtual currency markets have been through booms and busts before — and recovered to boom again. But this bust could have a more lasting impact on the technology's adoption because of the sheer number of ordinary people who invested in digital tokens over the last year, and who are likely to associate cryptocurrencies with financial ruin for a very long time...

[B]y many metrics, more people put money into virtual currencies last fall and winter than in all of the preceding nine or so years. Coinbase, the largest cryptocurrency brokerage in the United States, doubled its number of customers between October 2017 and March 2018. The start-up Square began allowing the users of its mobile app, Square Cash, to buy Bitcoin last November.

Almost all of the new customers on Coinbase and Square would be in the red if they bought cryptocurrencies at almost any point over the last nine months and held on to them...

Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or $90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a $25,000 loan. Her investments are now down about 90 percent.

"I thought that cryptocurrencies would be the one and only breakthrough for ordinary hard-working people like us," she said. "I thought my family and I could escape hardship and live more comfortably but it turned out to be the other way around."

In the United States, Charles Herman, a 29-year-old small business owner in Charleston, S.C., became obsessed with virtual currencies last September. He said he now felt like he had wasted 10 months of his life trying to play the markets.

While he is essentially back to the $4,000 he put in, he has soured on the revolutionary promises that virtual currency fanatics made for the technology last year and has resumed investing his money in real estate.

"I guess I thought we were 'sticking it to the man' when I got on board," Mr. Herman said. "But I think 'the man' had already caught on, and had an exit strategy."

Read the full article here.


1 comment:

  1. It's just making a quadruple bottom. Hold on for dear life! Digital bytes backed by nothing are the wave of the future. Gold and silver is what your Grandpa believed in. LOLOLOLOL ////sarc Work months and months to be able to buy a Bitcoin. It's on it's way to being $20,000 and then 100,000 and then 1 million, then 100 million!!! More LOL. Only fools would spend $6000 to buy a couple large bricks of silver and some gold coins. LOL again.

    You got Beanie Babied! You got Pet Rocked! You got Cabbage Patch dolled! You got caught up in Pets.com at $100 share with no earnings or revenue!