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As Value of Cryptocurrencies Falls, a Lot of New and Risk-Taking Investors Are Suffering Immensely (nytimes.com)
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 New York Times: 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. [...] By 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 and March. The start-up Square began allowing the users of its mobile app, Square Cash, to buy Bitcoin last November.
[...] 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 hardworking 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 in September. He said he now felt that 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."
[...] 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 hardworking 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 in September. He said he now felt that 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."
Those two anecdotes are stories of people hoping to magically get rich quick. The outcome is unsurprising.
Surprising Exactly Nobody...
Well, OK, surprising the poor suckers who bought into this high-tech reinvention of the classic pump-and-dump I guess, but no-one else.
Have you heard about investing in tulip bulbs?
"National Security is the chief cause of national insecurity." - Celine's First Law
"I thought that cryptocurrencies would be the one and only breakthrough for ordinary hardworking people like us,"
And yet you were throwing debt at what was essentially a "get rich quick" scheme? That's not ordinary nor hardworking, that's just idiocy.
Whenever taxi drivers start giving you investment tips, it's a bubble.
You are aware that is how the stockmarkets work, right? And I do mean the stock market, not shares themselves.
Don't fight for your country, if your country does not fight for you.
Unless you're shorting, the maximum you can lose is your initial investment. Which makes investing a dirt-simple risk proposition, since you automatically know before you invest your money exactly what's the maximum you could lose (all of it). So the amount these people have lost and are suffering is precisely measurable, and was precisely measurable before they ever invested.
If you borrow money to invest (loans or leveraging), or short stocks (where the maximum gain is the value of the stock, while the maximum loss is potentially infinite - the inverse of buying stock) without understanding the risks involved, it's your own fault.
I've bailed out friends and family members with loans - basically invested in them. But it's never affected me financially if they don't pay me back because I made each loan assuming they wouldn't pay me back and I would take a 100% loss. If they do end up paying me back, that's a bonus.
and have driven demand for more generating capacity in the power grid.
Yes by consuming the same energy as the industry, commercial and residential activities of a nation with 18million people at a time where emisisons and energy waste is considered critical, all the while bolstering the startup of decommissioned dirty power while the world is being screwed.
This planet is fucked. I just hope Elon builds the rocket in time.
The Greater Fool has been in practice long before the stock market and has been part of the stock market from its very beginning. It's your idiotic "it's the government's fault" thinking that leads to so many making the most basic investment mistakes like the two noted (all eggs in one basket).
Just to set the record straight, taxes in the US are geared toward long term investing and savings for retirement. It would be nice if it was also geared toward saving for higher education & primary residence ownership, but those parts have been all messed up for a while thanks to both parties.
No. People selling at 20k is smart. Greed is people buying at 20k.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.