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 bloodbath — which comes amid a broader stock market rout — range from the billionaire crypto titans who run leading marketplaces such as Coinbase and Binance to lowly retail investors who have poured their life savings into cryptocurrencies.
“I lost over 450k usd, I cannot 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 lose my home soon. I’ll become homeless. suicide is the only way out for me.”
“My ex-colleague attempted suicide,” reads another top post on the forum. “He basically moved all of his savings to crypto in 2021 and LUNA was a massive player in his portfolio.”
While Luna’s collapse is the most spectacular, other cryptocurrencies are also in freefall. Bitcoin was trading around $28,300 Thursday afternoon, down 20% over the past week and nearly 60% lower than 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.
The entire cryptocurrency market now has a market capitalization of $1.2 trillion — less than half of the $2.9 trillion it was worth in November, according to CoinMarketCap data.
“There’s a lot of folks out there who have taken some real bruises.” said Garrick Hileman, research chief at Blockchain.com. “In crypto, the strong tokens survive and the weak get flushed.”
In the past, drops in crypto have been touted online as a buying opportunity, which have juiced prices back up. Now with the threat of recession looming, it’s unclear if investors will “buy the dip.”
The ongoing rout gives fuel to detractors who have long argued that the decentralized digital currencies were a frothy fad fueled by low interest rates and pandemic-era stimulus checks.
The 98-year-old Munger recently referred to cryptocurrencies as a “venereal disease” that he was “proud” to have avoided. Berkshire Hathaway shares are up 5.6% over the past six months, while bitcoin is down 56%.
The crypto crash comes as the Federal Reserve hikes interest rates in an effort to cool inflation, sending high-risk tech stocks into a tailspin. The tech-heavy Nasdaq composite index is down 30% so far this year and has been heavily correlated with the price of bitcoin in recent weeks, according to Refinitiv data.
credit to @nypost
