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'Hilariously Rich' No More: The New York Times Talks to Crypto Investors Who've Gone Broke

By NexChange
FinTech, Blockchain

In early January, the New York Times published a feature story about a community of crypto investors in San Francisco – “developers, libertarians, Redditors and cypherpunks” – who were becoming wealthy just as Bitcoin and other cryptocurrencies were hitting record highs.

The Times‘ headlined its story: Everyone is Getting Hilariously Rich and You’re Not.

“There are only a few winners here, and, unless they lose it all, their impact going forward will be outsize,” the Times‘ Nellie Bowles wrote. “They also remember who laughed at them and when.”

Fast forward seven months and the Times‘ has taken a fresh look at how crypto investors are doing – and this time there aren’t any stories about young people getting “hilariously rich.” This time, investors are talking about the “hard lessons” that have been learned after the Bitcoin boom went bust.

One person the Times talked to was Pete Roberts of Nottingham, England, “one of the many risk-takers who threw their savings into cryptocurrencies when prices were going through the roof last winter.” The $23,000 that Roberts had invested in several different digital tokens is now down to $4,000.

“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.

There are others who bet a lot more than Roberts on cryptocurrencies – and have subsequently lost a lot more.

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.”

Charles Herman, a 29-year-old small-business owner in Charleston, South Carolina, tells the Times that he “wasted 10 months of his life trying to play the markets” after he “became obsessed” with cryptocurrencies last fall.

Many crypto investors have also been burned by initial coin offerings – either those that never delivered on their promises or were proven to be scamming investors the whole time. The Times notes that “almost none of these companies have delivered the software they promised, leaving the tokens useless, except as speculative assets.”

In its feature about all the people who were becoming rich as cryptocurrencies were booming, the Times spoke to a 25-year-old “rakish young investor with a hedge fund” named Jeremy Gardner who lives at a place called the Crypto Castle in San Francisco. Gardner talked to the Times about how unnerving the hype had become as Bitcoin was surging to record highs.

“Nothing feels real, it doesn’t feel real,” Gardner said at the time. “I’m ready for crypto assets to go down 90 percent. I’ll feel better then, I think. This has been too insane.”

Photo: Getty iStock

 

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