Crypto Investors Are Panic Amid Crypto Crash, Bitcoin Crash

Cryptocurrency investors panicked Thursday as Bitcoin and other digital currencies continued to slide.

Victims of the bloodbath – which comes amid a broader stock market rout – ranges from billionaire crypto giants running leading markets like Coinbase and Binance to humble retail investors who pour their life savings into cryptocurrencies.

“I lost more than 450 thousand USD, I can’t pay the bank,” reads one of the top posts on the Reddit forum for Terra Luna, a cryptocurrency that has lost more than 99% of its value over the past week. “I will soon lose my home. I will be homeless. Suicide is the only way out for me.”

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

While the Luna crash is the most exciting, other cryptocurrencies are in free fall as well. Bitcoin was trading around $29,000 at midday Thursday, down 17.7% over the past week and nearly 60% below its all-time high of $69,000 in November 2021. Other major cryptocurrencies including Ethereum and Solana are now worth fractions of their all-time highs launch.

“In cryptocurrency, the strong survive and the weak are eliminated,” said Garrick Hellman, Head of Research at
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The entire cryptocurrency market has a market capitalization of $1.2 trillion now – less than half of the $2.9 trillion market cap in November, according to CoinMarketCap data.

“There are a lot of people who have had some real bruising.” said Garrick Hellman, Head of Research at “In cryptography, the strong survive and the weak are eliminated.”

The continuing path gives fuel to critics who have long argued that decentralized digital currencies were a frothy fad fueled by low interest rates and pandemic-era stimulus checks.

Charlie Munger
Charlie Munger of Berkshire Hathaway described cryptocurrency as a “venereal disease.”
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Notable crypto critics include JPMorgan Chase president Jimmy Dimon, who once said bitcoin is “worthless” — as well as billionaire Berkshire Hathaway CEOs Warren Buffett and Charlie Munger.

The 98-year-old Munger recently referred to cryptocurrency as a “venereal disease” he was “proud” to avoid. Berkshire Hathaway shares are up 6.6% over the past six months, while bitcoin prices are down 54%.

The cryptocurrency crash comes as the Federal Reserve raises interest rates in an effort to cool inflation, sending stocks of risky technology companies tumbling. The tech-heavy Nasdaq Composite is down 28% over the past 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 before, this kind of convergence between Wall Street and cryptocurrency,” said Hellman, who is also a visiting fellow at the London School of Economics.

Investors who poured their money into bustling tech stocks have taken a beating along with crypto-fanatics.

“Help Needed: I Lost Everything in the Stock Market,” reads a popular post on the company’s Blind message board. “I invested every other dollar I saved in the stock market and I’m currently down about 85%.”

The 29-year-old Home Depot employee, who introduced himself as himself, said he mostly owns stock in tech companies including Meta, Peloton and Spotify.

“They made every bed,” angered the employee. “Same with encryption.”

Bitcoin’s performance is increasingly related to technology stocks.
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Bitcoin’s plunge is likely to frighten some of the retail investors who poured money into the cryptocurrency during the stimulus boom, while potentially tempting those hoping to buy the dip, according to Chris Klein of the Bitcoin IRA.

“It takes tourists from true believers,” said Klein, COO and co-founder of the 100,000-user crypto retirement investment site. “There will be people who will say, ‘You know what, crypto isn’t just for me. But there will likely be a lot of new people coming into the market.'”

Shares of Coinbase, the only major publicly traded cryptocurrency exchange, have fallen 83% since the company went public in April 2021. The company warned customers on Wednesday that their crypto holdings could be at risk if Coinbase went bankrupt, despite the insistence of its CEO. Brian Armstrong on that bankruptcy is not in the cards.

Queen Piece
Coinbase CEO Brian Armstrong insists his company will not go bankrupt — but his company has warned customers that their cryptocurrency holdings may be at risk.
Getty Images for Vanity Fair

While Hellman is optimistic about the long-term prospects for cryptocurrency, he said the current slowdown shows that amateur investors need to be careful.

“I feel for anyone who has been severely beaten because of what is happening,” he said. “You shouldn’t put more into this than you can afford to lose.”

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