Cryptocurrency crash causes trillions of dollars worth of damage

Cryptocurrency crash causes trillions of dollars worth of damage | 60 Minutes Australia

it’s the oldest saying in the book what
goes up must come down and in the
volatile world of cryptocurrency that’s
proving to be a brutal truth
crypto’s market value has halved since
its peak late last year hemorrhaging and
eye watering 2.2
trillion dollars
and it’s not just crypto geeks whose
dreams have been shattered but also
ordinary mum and dad investors sucked in
by the hype the currency had gone
however while many millionaires have
become overnight paupers
cryptocurrencies true believers say
don’t worry the good times will return
the question is who’s brave enough to
believe them
alex waters is a relative latecomer to
the high-tech hyped-up world of bitcoin
and blockchain
but two years ago the 32-year-old
entrepreneur from perth was finally
convinced by his mates that investing in
cryptocurrency would be a cruisy ride to
i actually had a friend that owned a
couple hundred bitcoin back in 2011. so
that was the first time i’d heard of
bitcoin and i knew that
there were some dodgy things happening
with it so you know really didn’t get
involved at that point um but yeah i’ve
had a lot of friends make a lot of money
in crypto over the last you know five to
ten years so what was the turning point
when was it that you thought to yourself
okay i’m jumping in i think it was just
that fear of missing out i didn’t want
to be left behind
that made me jump in really so fomo was
it was your overriding inspiration yeah
yeah nothing nothing too fantastic just
fomo yeah standard human being i think
that’s how most of us operate
alex is an adrenaline junkie and not
only in his downtime
building and selling a couple of real
estate companies in his 20s he’s reaped
the financial rewards so when he jumped
into crypto he decided to go big
how much do you think you’ve put in cash
400k well and what did it get to at its
peak i’ve seen it go up and down but you
know at one point i definitely um close
to doubled my investment
on the crypto roller coaster the best of
times can very quickly become the worst
of times
alex not only made a fortune
he also lost one and what’s that
investment worth now i haven’t looked at
it in a couple of weeks i’ve just been
taking a break after after everything
happened it sounds like you’ve got ptsd
crypto obviously right now getting
crushed erasing more than 200 billion
dollars from the entire investors
getting jolted by volatility rippling
through the crypto
they could lose it all and i don’t know
what in the world is going on so i’m out
no moss
alex was one of the tens of millions of
casualties of last month’s devastating
cryptocurrency meltdown
two of crypto’s supposedly safest and
most popular coins terry usd and its
sister coin luna went from hero to zero
in a matter of hours sparking a stampede
in the wider market that wiped out more
than 400 billion dollars in one brutal
day of bloodletting
for those of you thinking only nerds and
numb skulls get caught up in crypto well
i have to confess
i’m one of them too i decided to dip my
toes in the water because all my mates
were raving about how well they were
doing and look it was a bit of fun
within just a few months i’d more than
doubled my money and was thinking how
good is this
that was until the crash came within
only a few hours my portfolio flatlined
and i just about lost a lot
i’m not alone though more than a million
australians have invested in crypto and
the majority have now taken a pretty
significant hit particularly the mum and
dad investors who joined at the peak of
the hype last year
for the big players the losses are
simply staggering
if cryptocurrency was a casino sergey
sergenko would be one of its high
rollers the russian-born millionaire is
a self-confessed cryptomaniac who truly
did hit the jackpot
what were the first words that came out
of your mouth when you looked and saw
the crash
i go oh [ __ ] i mean
when you start thinking okay i’ve got
all this i’ve got everything i’ve got
literally the world of my
palm on my hand
and then all of a sudden you’re okay
there you go
the life and the market slaps you in the
face so how was your mood on that day
usually in moments like this i prefer to
go to sleep
hopefully that when i wake up
everything everything is back up to
so that was the mood on the day
the last time i met sergey was a year
ago when he invited me on a tour of his
family’s suburban palace in sydney
tom good to see you likewise
some sort of house you’ve got here
we’ll do what we can
this is the house that bitcoin built
right there’s some could say that that’s
right let me show you around off too
from humble beginnings sergey took out a
loan to become one of the early
investors in bitcoin it was a risky
gamble that allowed him to trade his way
to what he says was then a 100 million
dollar fortune what a difference do you
make sergey
tell me what it meant how’s your
portfolio looking now compared to a year
a lot slimmer
but uh you know in my particular case
i’ve seen it all before give me an idea
how much slimmer are we talking like put
it this way like
there was there was a week in february
that i was i was a billionaire on paper
right well
let’s say let’s say like if we say a
third of what it was or something like
i’m going to do some quick maths
you’ve lost 600 million dollars
on paper yes
have you got ice in your veins
no so you you felt it then you lost 600
million dollars
what what’s the feeling on that day
mine is a [ __ ] but you know like i i do
believe with the whole of my heart that
we still at the very start of the
for die hards like sergey crypto remains
on course to be the very future of money
but right now for some that promise is
on very shaky foundations there’s been a
noticeable loss of confidence in the
everyone’s wondering what the next big
disaster is going to be what’s going to
take prices down further and so on it’s
not an investment strategy it’s not the
future of money
it’s sort of a game of hot potato and
you could be the loser how many times
over the last few weeks have you had to
hate to say i told you so
david gerard wouldn’t invest in digital
currency if you paid him an aussie
living in london he’s made a name for
himself as a hard-boiled crypto skeptic
and author who sees the entire industry
as a dangerous cult
everyone loves the siren call
of a number going up and they think
here’s my chance
get rich quick schemes never work you
can’t get rich for free
um you’d think that was obvious but
people keep hoping
that there’s a way out and they’ll get
but it’s always a false hope and some
people do great but more people get
absolutely wrecked
since their peak late last year bitcoin
and the other major coins have lost half
their value in a market that has
hemorrhaged trillions the reasons for
the crash are complex rising inflation
and hikes in interest rates war in
ukraine and crypto’s relationship with a
struggling stock market are all factors
that have conspired to sap confidence
cryptocurrencies as it turns out are a
pretty ineffective hedge against
inflation and not much of a safe haven
in uncertain times
is this crash the beginning of the end
for cryptocurrency
i think it’s the middle of the end for
i think the air went out of crypto it’s
been leaking out over the last several
this crash has really brought it home to
people that yeah actually the music is
going to stop sometime the trouble with
crypto is it’s literally an unregulated
like there’s a few regulated exchanges
in proper jurisdictions like u.s uk
australia the ex the companies based
there do have people looking at them
but the vast majority of trading
is in unregulated offshore
casinos i would just call them casinos
the majority of volume
the way the market works the way pricing
is set it all happens in a completely
literally unregulated environment
and most vulnerable in this financial
wild west is a new wave of naive
it felt like in the last couple of years
cryptocurrency went from just being this
thing for i guess entrepreneurial nerds
to to mum and dad investors and
you know this really did go mainstream
pretty quickly
i think it really went mainstream in
february 2021 when elon musk bought a
pile of bitcoins for tesla because you
know he’s famous richest man in the
world buys bitcoins that is when you
hearing people in pubs talking about
their ethereum portfolio or whatever
it’s like betting on horses you can make
money betting on horses but that doesn’t
make horses an investment
you know some people are making a
fortune in crypto you can totally make a
fortune in crypto
you have to be a better shark than the
sharks who built the shark pool
because they will skin you and eat you
with four simple words that have been
whispered by the intrepid since the time
of the romans
fortune favors the brave matt damon is
far from alone in helping catapult
crypto into the mainstream yeah a whole
host of celebrities and sports stars
have been paid to jump on the crypto
spooking bandwagon like i was saying
it’s ftx it’s a safe and easy way to get
into crypto
yeah i don’t think so
and i’m never wrong about this stuff
celebrities aren’t to blame for the
crypto crash but david gerard sees their
gushing endorsements as legitimizing an
industry that he says is full of market
manipulation scammers and crooks we have
to think about the real victims the mums
and dads the grannies who think their
retirement should go into crypto the
people who bought in in just six last
six months they’re basically going to be
stuck with magic beans and they’re
trying to work out how to offload them
they lost their money when they bought
a lot of them are just going to have to
take the hit and it’s not going to be
nice have you heard many stories like
that of people who who thought they’d
load up in the last year or so and all
of a sudden have realised they’ve lost
the entire investment
they’ve been wall-to-wall stories like
that in the last couple of weeks there’s
real human cost here and that’s the
ordinary people who get scammed
that has to be the moral core of the
discussion about cryptocurrency
the catch crying crypto is that you only
lose when you sell
so far from panic when it all started to
go pear-shaped last month entrepreneur
alex waters thought he could turn it to
his advantage
when did you first realize the market
was crashing i was watching the market
every day
you know around that time and i saw it
starting to dip so you’re watching this
in real time effectively just going oh
it’s there oh it’s there oh no
yeah yeah what’s going on in your head
and your heart at that point i thought
to myself that this was a
an epic opportunity
alex had money in the two crypto
currencies that crashed hardest
taking a punt on them bouncing back he
piled in
even more
but the classic investment strategy of
buying in the dip proved to be a
everyone was just pulling their money
and yeah that went from
a hundred dollars a coin down to
percentages of a cents right now so 150
is worth about 15 maybe less right now
so you’ve lost 150 grand in one hit
how does that make you feel
there was definitely a moment i would
say a 24-hour period where i was like
damn what have i what have i done
but i just realized that that that
mindset doesn’t actually help me at all
and there are so many people um out
there with way more money than me so
much smarter than me that also lost a
lot more money than me in this crash and
so um
i have no choice but to
accept that loss
alex may have been burned but he can’t
wait to head back into the furnace with
an unshakable belief that the bust will
become boom once more since the crash
have you pumped more cash in and bought
more crypto i’ve got money sitting in my
exchange ready to buy some bitcoin yeah
i haven’t bought any yet um thought i’d
take a week off just let the dust cool
and um
yeah but i’ll buy some more bitcoin in
the coming weeks for sure
so you’ve got no doubt then that
this is just a blip on the radar
absolutely yeah absolutely why do you
think there are so many people that say
this is
effectively a house of cards it’s a scam
it’s a ponzi i think it’s the same with
any kind of new technology or new
advancement in
in society um we tend to reject what we
don’t understand
people want to hate on something before
accept it and and join it right
so you think they’ll all come around
i think so well i hope so because
that’ll make a big difference to my
help this guy out he’s lost 150 grand
get involved put my wallet address on
the screen will you tom
for crypto king sergey sergenko the
stakes are far higher but he sees losing
600 million dollars as just part of the
game of risk and reward
i mean there’s a lot of war reefs
and this is uh difficult
but you know
like i said tomorrow is a new day the
sun is still gonna rise up
and uh i mean
a lot of uh
a lot of people on this planet have it a
lot worse than
myself as well
in this wild digital frontier there’s
one thing that keeps investors coming
back for more and it’s the very thing
that cryptocurrency will need to bounce
crash or no crash that’s something
sergey has in spades
if you or anyone watching lost
a lot of money on guys doing stress
tomorrow is a new day
whatever comes down always goes up
any temptation to quit the game now
no mate it’s only getting started
if it was easy anyone would do it
you know but this is this is
there is a saying
if you can’t handle my lows you don’t
deserve my highs
and you know it’s like i believe in that
hello i’m tom steinfert thanks for
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