‘Watch it burn’: Crypto wiped out in horror crash

Crypto investors panicked on Thursday as the value of cryptocurrencies, including bitcoin, plummeted, with some saying they would lose their homes as a result.

Crypto investors panicked on Thursday as bitcoin plummeted to its lowest price in more than a year and other cryptocurrencies endured even worse sell-offs.

Victims of the massacre – that comes amid a… broader stock market price – ranging from the billionaire crypto titans who run leading marketplaces such as Coinbase and Binance to humble private investors who have deposited their savings in cryptocurrencies, the New York Post reported.

“I lost over 450k usd, I can’t pay the bank,” reads one of the top posts on the Reddit forum for Terra Luna, a cryptocurrency which has lost more than 99 percent of its value in the past week.

“Soon I will lose my house. I’m going to be homeless.”

“My ex-colleague tried to commit suicide,” reads another top post on the forum. “He basically moved all of his savings into crypto in 2021 and LUNA was a huge player in his portfolio.”

Another user wrote: “This seems unreal. I can’t believe this is happening, I basically lost 60k overnight with what could have been considered a risk off asset for 3 days and there’s nothing I can do about it. I can’t sell, can’t buy, I can just watch it burn. This is insane. What the actual f**k.”

While Luna’s collapse is the most spectacular, other cryptocurrencies are also in free fall.

Bitcoin traded around $28,300 ($AU41,200) on Thursday afternoon, down 20 percent over the past week and nearly 60 percent lower from its all-time high of $69,000 ($AU100,000) in November 2021. Other major cryptocurrencies, including Ethereum and Solana, are now worth a fraction of their all-time highs.

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The entire cryptocurrency market now has a market cap of $1.2 trillion dollars — less than half of the $2.9 trillion it was worth in November, according to data from CoinMarketCap.

“There are a lot of people who have actually suffered bruises.” said Garrick Hileman, chief of research at Blockchain.com. “In crypto, the strong survive and the weak are purged.”

The ongoing defeat is fueling opponents who have long argued that decentralized digital currencies were a frothy craze fueled by low interest rates and pandemic-era stimulus.

Prominent crypto critics include JPMorgan Chase boss Jamie Dimon, who once said bitcoin is “worthless” — as well as billionaire Berkshire Hathaway executives Warren Buffett and Charlie Munger.

Munger, 98, recently referred to cryptocurrencies as a “venereal disease” that he was “proud” of having avoided. Berkshire Hathaway shares are up 5.6 percent in the past six months, while bitcoin is down 56 percent.

The crypto crash comes as the Federal Reserve raises interest rates in an effort to cool inflation, sending risky technology stocks into a tailspin. The tech-heavy Nasdaq composite index is down 30 percent so far this year and has been highly correlated with the price of bitcoin in recent weeks, according to Refinitiv data.

“We’re seeing more ownership overlap than ever, this kind of convergence between Wall Street and crypto,” said Hileman, who is also a visiting London School of Economics.

Investors who have put their money into buzzy tech stocks have taken a beating alongside crypto fanatics.

“Help needed: EVERYTHING LOST in the stock market,” reads a popular post on the corporate message board Blind. “I’ve invested every last dollar I’ve saved in the stock market and I’m almost 85 percent down right now.”

The self-identified 29-year-old Home Depot employee said he primarily owned shares of tech companies, including Meta, Peloton and Spotify.

“They’ve all been in the bed,” the employee raged. “Same with crypto.”

According to Chris Kline of Bitcoin IRA, Bitcoin’s plunge is likely to deter some of the retail investors who have put money into crypto during the stimulus-driven wave, while potentially enticing those looking to buy the dip.

“It takes the tourists away from the true believers,” said Kline, the COO and co-founder of the 100,000-user crypto retirement site. “There will be people who say, you know what, crypto just isn’t for me. But there will probably be just as many new people entering the market.”

Shares of Coinbase, the only major publicly traded cryptocurrency exchange, have fallen 84 percent since the company went public in April 2021. The company warned customers on Wednesday that their cryptocurrency holdings could be at risk if Coinbase goes bankrupt, though CEO Brian Armstrong insisted bankruptcy is not in it.

While Hileman is optimistic about the long-term prospects of cryptocurrencies, he said the current downturn shows that amateur investors should be cautious.

“I sympathize with everyone who has been beaten up by what is happening,” he said. “You shouldn’t put more into this than you can afford to lose.”

This story first appeared on the New York Post and has been republished here with permission

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