More than half of Bitcoin investors have lost money

Cryptocurrency investments are fraught with risk. Most Bitcoin investors jumped in during the hype of 2021 and have lost money as Bitcoin’s price has fallen drastically from its all-time high of $64,400 in November 2021.

Reference: Money.com

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Nasro Djebbar
Potential
June 15, 2022 3:14 pm

I’m a middle of the road type of guy when it comes to blockchain, crypto, NFTs and such. I’m not a doomsday naysayer nor am I an early adopter. I draw the line on crypto coin founders that milk their investors (fans?) with the primary purpose of enriching themselves. I don’t know what’s more cringe, the cult-like vibes some of these crypto founders have or the die-hard fans who worship them. OneCoin is a perfect case study of how a founder’s appeal got people to eagerly part with their money. A Ponzi scheme led by the now-untraceable Ruja Ignatova, pulled in $4 billion of total investment. Fans really thought they were onto a game-changer and noticeably got mad at critics and sceptics.

TechLead, the guy who likes to remind us he’s ex-Google and ex-Facebook, had a tumultuous 2021 when his Million Token was exposed as a scam. The memes of him going to jail (as a millionaire) were hard to miss. But where is he now? Still on YouTube with 3.5 million subscribers, claiming to be poor now, pushing high views. It’s the impunity that gets me. They’re ruining lives and getting away with it.

Let’s move on to Luna. Do Kwon, the South Korean trash-talking Stanford grad did a great job hyping up his coins Luna and TerraUSD. The once $40 billion value of Luna is worth close to nothing now, leaving in its wake a gigantic number of devastated investors who’s lives have been ruined. It’s also left some “Lunatics” red-faced. Ask Mike Novogratz, the CEO of Galaxy Digital, what he thinks about his Luna tattoo now.

Despite the havoc wreaked by Do Kwon’s actions and hubris, he gets a second chance. The hard fork to Luna 2.0 is unsettling because Do Kwon created the mess. He should be gone. In what other company can the leader cause catastrophic damage and be given another shot? Speaking of unsettling, the now-deleted(?) Terra Ecosystem Revival Plan 2 on agora.terra.money makes for some sober reading, especially Matt21621’s post:

Investors’ lives are in shambles. I will never support anything you do again. And I am in disbelief at your audacity. I have no words Do. You’ve stolen everything from me and many I know. I hope you don’t get a round two and I will spend every waking moment of the rest of my life to ensure you don’t.

The South Korean authorities have indicated that prison time isn’t on the cards for Do Kwon. Another unsettling precedent.

Terra Ecosystem Revival Plan 2.jpg
andrej klocke
June 17, 2022 5:29 pm

I invested in Bitcoin during peak hype and lost a lot of money. I put in much more than I could afford to lose and it’s taken me a long time to come to terms with it. Back then I thought crypto was the key to a different life. We all heard about people getting rich quickly and I wanted in. During the slump of ’21 people around me were talking about their losses like a badge of honor, certain that BTC would rise again. And it did. But then it fell once more. Thinking a recovery was underway at the beginning of ’22, I held on, but now I’ve lost so much of what I worked for years to attain.

Crypto trading has a unique and dangerous ability to hook and reel you in. On other coins I’d risk 2% per trade at the beginning. You make a loss here and there, and then you start risking 5%-10%. Next thing you know, you’re losing and losing, desperately trying to recover what you lost. It’s even worse when you know things were so easy before. In the bull run, anyone could have invested $1000 in any random coin and doubled or tripled their money. The same happened to me. I purchased BNB worth $400 and within a few hours it was worth $700. I was mesmerized by how easy it had been. That’s the trap. It was too easy. I had a taste and I wanted more. It’s difficult not to get greedy when the gains came so easily.

Despite what I’m saying, the ball lies in the trader’s court. You can’t put the blame on anyone else. Another poster has mentioned Do Kwon and to be honest I don’t think he’s responsible for the losses of Luna’s investors. Everyone invests at their own risk. They should have done their due diligence. The UST and the whole depegging thing, they should have been aware of that. Had they done their research they might not have invested into Luna. A lot of researchers had been pointing out this serious problem with UST and Terra Luna, which eventually led to its collapse. I would say that around 90% of the average retail investors never do their due diligence and end up losing all their money (ironic coming from me, right?). And then they complain that it’s a trap, a scam etc. 

If I could turn back time I’d probably stick to spot trading and not futures. Futures are risky simply because a 1% move could lead to a 10% up or down move. Leverage is a double-edged sword. It can go in your favor or it can ruin you. Since I lost my money I’ve been practising paper trading and really getting a deep feel of the fundamentals. I plan on taking a funded forex account test to get back into trading. Not crypto but similar principle. I no longer have the funds to trade by myself so I need to pass a test (think FTMO, The5%ers), and if I pass the test I’ll get access to a funded account ($50k-$200k). It’s been a tough lesson to learn but I feel it’s for the best. I’ve learned a lot about myself and the importance of remaining disciplined as a trader.

Last edited 3 months ago by andrej klocke
Cristina Pellini
Potential
June 14, 2022 9:57 am

You’re in New Delhi, India. The roads are crowded with cars, trucks, motorcycles and auto-rickshaws. All are competing for space to inch forward in the heavy traffic. To your unaccustomed ears, you hear horns blaring on either side of you 🔊 Beep! There goes one. And another. What does it all mean? You feel lost in the sounds and strangely mesmerized by it. After a while the cacophony becomes normal, almost like white noise.

Now you’re in Berlin, Germany. The roads are quieter. The sounds you hear aren’t horns but the revving of engines. Then you hear one! A loud, elongated horn. Everyone stops what they’re doing to look. A close shave. An accident narrowly missed. A horn like that is rare. It is noticed.

The contrasting sounds of Indian and German roads and the resulting attention we pay to each teaches us a lesson. If there is too much of anything, it isn’t special. If something is rare, it has value. And so goes the logic with Bitcoin.

Bitcoin had tremendous value in late 2020 when it started to rise. If you had invested in Bitcoin in Q1 2021, you still could have done well for yourself. By Q2 2021, Bitcoin became the Indian road horn. Everyone was tooting the Bitcoin horn and getting in on the action. But it was too late. Bitcoin peaked that year on 12 March 2021 and lost half its value soon after. A resurgence in 2021 could have made investors some money, but those who had invested during the hype had little to show for it. Even worse, if they held out hoping for another monumental price rise, they’d wish they didn’t.

Everyone who invested in Bitcoin after December 18 2020 and held on to it has lost money. But those who invested before the hype, before the Indian Horn Era, could still make a large profit if they sold today. Getting in on something before it blows up isn’t easy. That’s why so few investors achieve high returns. It is also why so many investors jump at the opportunity to invest in a newly-minted coin hyped by a charismatic creator. People want to replicate the returns of Bitcoin but fail to understand the chances of that happening again are very, very slim.

Delhi traffic.PNG
Jason Ng
Impact
June 18, 2022 5:30 pm

It’s so easy to have fallen into the Bitcoin and wider crypto trap. When Bitcoin had its first major price rise in late 2017, I’d done some stock market investing. Apps were hitting the market that promised low transaction/commission fees. The idea of relying on a broker was a thing of the past. Lured in by the prospects of day trading, I signed up to an app called Degiro and looked for ways to make short term profits. Since 2012, Facebook’s stock price had steadily risen. So I set to work on buying FB shares, holding onto it for a few hours, and selling once the price fluctuated above my original buying price. I remember making something like £60 (about $80 back then) in a few hours.

I looked at Facebook’s stock and thought if I had invested in August 2012 and sold 5 years later in August 2017, I’d be a very wealthy individual. Ever since Bitcoin’s massive rise in 2021, I’ve always considered what I’d be holding onto if I had put my 2016 investment into Bitcoin. The following calculations have run through my head:

If I had invested £1,000 in September 2016, it would have been worth £102,682 in November 2021.

If I had invested £5,000 in September 2016, it would have been worth £512,410 in November 2021; over half a million pounds sterling.

It’s this kind of thinking that got people to jump head first into the Bitcoin rabbit hole. It’s almost mythical to think something can rise that much. It’s unheard of in the stock market and was a startling reality for early Bitcoin investors.

But the problem with looking at highs and lows is that we do it when it’s already happened. Retrospect and hindsight is a hell of a thing. Anyone can look at the lowest price of Facebook stock and wonder how much they could have earned if they sold their shares when it peaked. Easy to do that with FB and easy to do that with Bitcoin. Sometimes we forget that it’s a totally different thing when you’re actually holding the stock. When you buy Bitcoin, you don’t know if it’s at it’s lowest point. Similarly when it’s rising, you’re on the edge of your seat wondering if it’ll go higher or it’ll tank the next day. No one knew the exact highs and lows of Bitcoin.

However the fantasizing, the what ifs had a strong pull. What if I had invested in Bitcoin in 2016? Where would I be now? How different would my life be? That fantasizing drew people into Bitcoin when it was already rising. Some felt they had missed the boat and reluctantly restrained from putting money in. Those people are probably thankful they could exercise restraint against such a strong pull. There are those on the other hand who went all in and lost everything.

Looking across years of Bitcoin price changes is alluring. Of course you look at the highs and lows. Nowhere on the finance charts does it reveal imperfect information and uncertainty; only a relentless rise a hundred times what it was worth a few years previous. Until now…

Bitcoin price rise.png