Investors Respond to Crypto Plunge
FILE - In this photo illustration created on January 8 2021 a representation of the virtual currency bitcoin is seen in front of a stock chart. Bitcoin the most popular form of cryptocurrency has lost more than 70% in value since its peak last November.
“I work in a cryptocurrency chat group,” Adam Hickey a software engineer in San Diego California told VOA.
Hickey said members of the group have been writing things like “bloodbath” for the past few days Hickey said. and "Are we okay?"
stuff like that. "It shocked me Honestly," he admits. "I just need to stop checking my balance. A few months ago I tripled my investment in cryptocurrencies. Now I'm down 40%.
Hickey is by no means alone. Serious and casual investors across the U.S have seen the value in their U.S investments Public digital assets known as cryptocurrencies have shrunk sharply in recent months with a sharp drop in the last week alone.
Bitcoin the most popular form of cryptocurrency has lost more than 70% of its value since its November peak erasing more than 18 months “I have to remind myself that when I got into Bitcoin in 2017 I hoped it would be the next Amazon com,” Hickey said.
like many other hickey dreams Cryptocurrencies could be a way to get rich long-term or at least part of his retirement savings.
"I've always looked at it as a long-term investment. It's still one of the most nervous for me," he said. "You hear people on social media saying this is It's all Ponzi schemes. Now that I have this thought maybe these warnings are right - those who push Bitcoin hard are the ones who bought it at the earliest low prices. Of course they want people to buy and drive the value back. It's good for them but is it good for them? I? "
Getting in
Those who are skeptical of cryptocurrency point to its lack of regulatory oversight by the government as a major cause of concern making it vulnerable to scams and wild price swings.
"I've always seen it as a highly speculative investment," says Marigny deMauriac a certified financial planner in New Orleans Louisiana. "It's not something that anyone should own most of their wealth unless they want a significant How much unnecessary risk. "
“I tell my clients not to invest most of their wealth in cryptocurrencies or any other highly speculative type of investment,” deMaruiac told VOA. However many of the most ardent cryptocurrency supporters invest precisely because of its Government is the same as traditional currency. The ability of digital currencies to emerge rapidly is an important part of their appeal.
Steve Ryan a self-employed poker player living in Las Vegas Nevada started investing in digital currencies nearly a decade ago. "I've been involved with it for a long time and I know more about this stuff than the average person would have read about it on the Internet a year or two ago," he said.
Ryan invests at the advice of a startup friend; back when a bitcoin was selling for a few hundred dollars not the tens of thousands they sell today.
“Most of my money is in cryptocurrencies and I wish I could keep more of it rather than sell some of it,” he told VOA. "Even after this downturn if I gave it my all I'd be a multi-millionaire."
Losing value
U.S inflation is at a 40-year high prompting the Federal Reserve to raise interest rates sparking jitters across financial markets. Meanwhile some Americans have lost interest in riskier investments.
Many have sold their cryptocurrency holdings and reinvested in safer more stable assets. Over the weekend the value of a single share of bitcoin fell below $18,000 from a high of more than $64,000 late last year. Total cryptocurrency market cap falls below $1 from a peak of $3.2 trillion Trillion.
"I'm definitely worried today," Ryan said Saturday as bitcoin hit its lowest point since December 2020.
Ryan still insists that he still believes in Bitcoin.
“I am concerned because we have a war in Europe and we are trying to recover from the impact of the pandemic and governments may try to regulate bitcoin,” he said. “But I’m not worried about Bitcoin itself — I think It's as sturdy as ever. This is how the cycle works and this may prove to be one of the best times to enter cryptocurrency in history. "
Casual cryptocurrency investors may be less sure but many seem willing to hold what they have in the hopes of a rebound. "Of course when it went up to over $60,000 I had a big dream that I could make enough money to go on a big trip or put down a down payment on a property," Joe said. Frisard is a semi-retired resident of Atlanta Georgia.
He acknowledged that the economic downturn has lowered Frisard’s ambitions but he still plans to hold on to the cryptocurrency he hasn’t sold as it nears its peak. "I also lost a lot of money in the stock market," he said "but I don't see sell my stock. They are a long-term investment and I look at Bitcoin in a similar way. "
Weathering the storm
“I care more about stocks in my retirement fund than my relatively small cryptocurrency holdings,” he said. Henderson remembers his father converting his retirement fund into cash in 1987 at age 69 when the recession temporarily destroyed the stock market.
"He was very proud of his timing," recalls Henderson "but in reality if he weathered the storm and left his money in the stock market for another two decades he would end up with eight times as much money. That's the way I look at cryptocurrencies. I'll stick with it Maybe it will pay for college for my kids. If not I'm prepared for failure. "
Colin Ash an urban planner in New Orleans Louisiana has owned bitcoin for years but said he thinks it’s “an interesting gamble.”
"Of course I wish I could time it perfectly and sell it all at the peak," he said "but it's unrealistic to think you can do that with any kind of investment. I think it's different from my other The money is divided. If anything turns out in the long run Then great. If not at least I've sold some and paid off some debt. "
For Hickey of San Diego and many other investors the key is not to invest more than you can afford to lose especially in speculative assets like cryptocurrencies.
“With everything down to where it is now I’ve decided to stop buying bitcoin on a regular weekly basis,” he said. “I think I’m done investing now.”
He paused then said “It’s kind of hard right now because if you want to make money you should buy low and sell high. Bitcoin is low so I’ll probably be back before you know it.”
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