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Crypto hype returns. Will people be more restrained this time?

The cryptocurrency world is experiencing a resurgence. As of the publishing of this article, Bitcoin’s price stands at $69,734 and has multiplied in value by a factor of 2.5 within a year (Bitcoin’s price on 27th May 2023 was $26,867.90). It’s currently valued higher than its previous peak in late 2021. Ethereum is experiencing a similar resurgence, having more than doubled in value over the past year. With the potential of another bull run on the cards, there’ll be renewed interest in crypto investing. Given crypto’s historic volatility, will people be a bit more restrained this time round?

When the value of various crypto coins shot up in late 2020 and throughout 2021, there was enormous hype. People saw crypto as a way to get rich quick. Dogecoin, for example, was initially seen as a joke but in a little over a month in April/May 2021, its value increased by a factor of 11. The feeling was, if you could pick a coin and it ‘went to the moon’, you could become incredibly wealthy overnight.

The media played into the hype, publishing story after story of those who’d become crypto-millionaires. People, of course, didn’t want to read about someone who invested sensibly, didn’t take too much risk and generated a moderate return. Instead it was the person who had little, was living from paycheck to paycheck, who decided to put his money into Bitcoin and came away with millions in the bank; that’s what people wanted to read. And it fuelled a frenzy of crypto investing.

News article title that says "Brothers become millionaires overnight after investing $257 in cryptocurrency".
The media published many of these millionaires-overnight crypto stories.

Many crypto investors, day traders and hobbyists fell into the rabbit hole. They’d make a bit of money at first. All would be well until they’d make a loss, sometimes a loss that was bigger than anticipated. Desperate to recover their losses, they’d spend more and more money, getting trapped in vicious cycle of temptation, greed and desperation, until it was all gone. Many people lost their life savings in crypto.

And when FTX collapsed in November 2022, it wasn’t just Sam Bankman-Fried (SBF) who came in the firing line. An entire industry and system was exposed, from the Forbes 30 Under 30 list that kept promoting fraudsters, to a multimillion dollar social media niche of finance influencers. MeetKevin, a finance YouTuber with 1.97 million subscribers, said he liked and trusted SBF. Graham Stephan, another finance YouTuber with 4.73 million subscribers, said he trusted SBF because of the car he drove. And Nas Daily, a content creator with tens of millions of followers across various social media platforms, called SBF “the most generous billionaire”.

Nas Daily with Sam Bankman-Fried
Nas Daily called Sam Bankman-Fried “the most generous billionaire”.
Graham Stephan YouTube video thumbnail and title, "My Response To FTX".
Finance YouTubers published videos apologising for promoting FTX.

These content creators offered apologies for having promoted Bankman-Fried and FTX and then continued to make content on other topics. Many felt crypto’s days were over after the FTX collapse and some even called for regulation banning cryptocurrency altogether. Experts, however, were proven wrong as crypto values continued to rise throughout 2023. And now, with Bitcoin having reached its highest ever valuation, many investors (possibly even those who’d lost money in 2022) are thinking of getting in on the action. Worldwide interest in crypto (based on Google searches) peaked in March 2024 after almost 2 years. Will people be more circumspect this time round?

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