Thursday, 27 February 2020

Reality Sets in Post-Cryptocurrency Boom

When promising investments rapidly turn sour

For a few months in 2017, cryptocurrency looked like a good investment. That’s a bit of an understatement: there was a period in there where cryptocurrency offered the promise of a massive return on investment, with certain currencies featuring exponential levels of growth. Get in at the right time and, theoretically, you might be able to turn your initial investment into something massive.

That’s the problem with boom-and-bust cycles, though. As long as you’re on the “boom” side of things, you’re all right. Once you’ve entered the “bust” phase, though, all bets are off — and that can lead to some spectacular financial losses.

At MEL, Andrew Fiouzi talked with people who lost tens of thousands of dollars, if not more, by investing in cryptocurrency. Which leads to observations like this, amidst abundant tales of woe:

“At the time, we all thought we were going to the moon and there would be Lambos lined up on the other side,” says Kyle, a crypto community moderator. “But turns out most of us ended up with Camrys.”

Fiouzi’s article chronicles people who have lost absurdly large sums of money, including one guy “who just last year posted an image of his repayment schedule for the nearly $400,000 loan he took out to invest in crypto.”

To say that this is a cautionary tale is something of an understatement. The article covers multiple people who took out loans encompassing six-figure sums in the hopes of making even more in the cryptocurrency world. This did not work out terribly well for anyone involved.

Investing in new and volatile technology can be a tricky business. Fiouzi’s article demonstrates this in some of the most disquieting terms possible — and yet it’s probably a given that, come the next boom a la cryptocurrency, some will be making the same mistakes.

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