If you have a friend who’s “into crypto”, then now is the time to check in on them. In late January, prices of Bitcoin and Ethereum, two of the most popular cryptocurrencies, plunged to levels that many experts never predicted, and memecoins like Dogecoin were dragged down with them. Countless people have watched thousands of pounds disappear before their eyes.
This was a sudden shock rather than a slow burn. Bitcoin reached an all-time high of around $69,000 (£50,850) in November, but then dropped over 40 percent within a few months. As a whole, the crypto market has decreased in value by more than $1 trillion (£737bn) since Bitcoin’s peak, but it has shown signs of rallying in the last week or so.
Many experts have touted crypto as a democratised form of Wall Street investing, with the prospect of financial elevation awaiting anyone who dares to join the party. But in reality, it seems to have panned out for only a select few. Many crypto-investors are ordinary people taking a risk with their life savings rather than elite traders who can swallow sudden losses. A recent CNBC survey of 750 crypto investors found that a third actually knew very little about what they were investing in. The question is: What happens to these people when they lose big?
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