After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors

SAN FRANCISCO — Pete Roberts of Nottingham, England, was one of the many risk-takers who threw their savings into cryptocurrencies when prices were going through the roof last winter.

Now, eight months later, the $23,000 he invested in several digital tokens is worth about $4,000, and he is clearheaded about what happened.

“I got too caught up in the fear of missing out and trying to make a quick buck,” he said last week. “The losses have pretty much left me financially ruined.”

Mr. Roberts, 28, has a lot of company. After the latest round of big price drops, many cryptocurrencies have given back all of the enormous gains they experienced last winter. The value of all outstanding digital tokens has fallen by about $600 billion, or 75 percent, since the peak in January, according to data from the website coinmarketcap.com.

“What the average Joe hears is how friends lost fortunes,” said Alex Kruger, a former banker who has been trading in the cryptocurrency markets for some time. “Irrational exuberance leads to financial overhang and slows progress.”

Kim Hyon-jeong, a 45-year-old teacher and mother of one who lives on the outskirts of Seoul, said she put about 100 million won, or $90,000, into cryptocurrencies last fall. She drew on savings, an insurance policy and a $25,000 loan. Her investments are now down about 90 percent.

“I thought that cryptocurrencies would be the one and only breakthrough for ordinary hardworking people like us,” she said. “I thought my family and I could escape hardship and live more comfortably, but it turned out to be the other way around.”

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So, how much money did you guys lost!?

I remember last year my older sibling was hyping up cryptocurrency as if he only just heard of Bitcoin within the months it blew up in the stock markets, "it's the next big thing in currency" he would exclaim. Being the stubborn one he is he shut me down as if I knew nothing about it despite having been aware of it for many years. He is that older bro that loves to feel like he's right over everyone else, no matter how wrong he could be - when I expressed weariness on it he enforced how wrong I was.

Funnily enough, he stopped talking about it completely like he just wanted to pretend he never invested in it in the first place. I guess his pride bit the dust.

Zero dollars. Always knew it was a bubble waiting to burst, since it's an investment backed by little more than demand and sentiment. The moment the former saturates and the latter dips a bit, it was going to come crashing down. Compounding this is the fact that there are very, very few things you can do with cryptocurrencies right now.

Which is good news for me. I'll be able to afford my next graphics card upgrade now. Just waiting for those RTX 2070 benchies...

The number one rule of investing is don't invest in something you do not understand. A lot of the people investing in Bitcoin did not understand what they were investing in and have nobody to blame but themselves for their losses.

Im sorry, but I avoided that scam. Litteraly all of my "smart" friends who threw good money at this scam sounded like idiots trying to sell me on it. If you guys are gonna invest put that money into a roth IRA and then focus on investing in businesses and products that can generate actual profit.

Avoid trendy investments.

Bingo......its those techies that think just because theyknow a thing or two about computers that they are smart enough to speculate on some goofy scifi investment

I agree - don't get suckered into an investment you were never going to make without the sales pitch - it's like going out for milk & coming back with a leased BMW. Always, always dyor imho

The friggin Russian hack into the DNC was friggin funded by bitcoin.

and I am the crazy one to say 'bitcoin is going to fund international money laundering and weapon purchases'

0 dollars here. I never understood how the concept of creating digital currency out of nothing had any legit permanence.

I hopped on the band wagon of creating proprietary hardware for mining cryptocurrency, went well until my partner destroyed all of our prototypes in a freak accident led on by a distracting phone call in the middle of an experiment.

It was just a matter of time for all of that bubble to explode. I think it was a great win for those who was smart enough to sell theirs when it was hot and a loss for everyone who invested without knowledge. In my case, I went on quietly and sold a bit when it was hyped. For the moment still waiting for the market to calm down, cause it still needs some time.

I was kicking myself for not getting involved earlier, now I'm patting myself on the back.