Proponents of cryptocurrency promote the technology as a potentially game-changing new form of currency. It may well become that someday, though right now, they are used more as speculative investments than a medium of exchange for goods and services.
There are many stories of investors making it big in crypto. However, it can be unstable even in the best of times, which these most certainly are not. With the speculation-driven market seemingly crashing, many crypto investors are now looking at a significant loss. This includes YouTube and social media star Logan Paul, who is reportedly looking at a loss of half a million dollars and counting.
The cryptocurrency market was reportedly worth around $3 trillion last November. However, it has since fallen to about $1.51 trillion, according to Reuters, a decrease of nearly 50%. Bitcoin, for example, is below $26,000 for the first time since 2020, and less established cryptocurrencies like Luna and TerraUSD have crashed completely. YouTube star Logan Paul is one of many crypto investors feeling the hurt, revealing that he has lost about $500,000 so far. He’s not even the only major YouTube star looking at a crypto loss, with Paul claiming that his business parent KSI is down over $3 million and counting.
“It’s not a great time to be fully involved in crypto,” said Paul, summarizing crypto’s implosion in value. However, he wasn’t broken up about the loss either, calling it a “bump in the road” and reaffirming his faith in the technology. While that may sound flippant, Bank of America’s cryptocurrency analyst Alkesh Shah expressed a similar sentiment. He pointed out that the current crisis does not necessarily spell doom for the entire market. He notes that the 50% drop came after a period of 350% growth since January 2021. Shah points the blame to rising inflation and increased interest rates rather than an intrinsic problem with the crypto market itself.
For his part, Logan Paul, who recently revealed his own idea for an investment marketplace, encourages fellow crypto investors to remain calm and avoid panic selling. “If you play the long game, you’re going to win,” Paul said. But, again, he is not the only one voicing that opinion. Many experts believe that Bitcoin can rebound if its value stays above $21,000. The cryptocurrency still has a long way to go before coming close to that potential point of no return.
Cryptocurrency remains a somewhat controversial topic. A few major businesses accept payments in crypto. However, there is still not much established infrastructure compared to other forms of exchange, and many remain skeptical if crypto will ever become mainstream. This is not helped by the perception that crypto values have more to do with marketing and groupthink than traditional economic forces. And that’s not even getting into environmental concerns and the effect cryptocurrency mining has on the electronics supply chain.
Source: Dexerto, Reuters