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.
The virtual currency markets have been through booms and busts before and recovered to boom again. But this bust could have a more lasting impact on the technologys adoption because of the sheer number of ordinary people who invested in digital tokens over the last year, and who are likely to associate cryptocurrencies with financial ruin for a very long time.
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.
It is hard to know how many cryptocurrency investors are now in the red, with holdings worth less than the money they put in. Many who have lost money in recent months had gotten into the markets before the big run-up last year, and their holdings are still worth more than their initial investments.
But by many metrics, more people put money into virtual currencies last fall and winter than in all of the preceding nine or so years. Coinbase, the largest cryptocurrency brokerage in the United States, doubled its number of customers between October and March. The start-up Square began allowing the users of its mobile app, Square Cash, to buy Bitcoin last November.
Almost all of the new customers on Coinbase and Square would be in the red if they bought cryptocurrencies at almost any point over the last nine months and held on to them.
The damage is likely to be particularly bad in places like South Korea and Japan, where there was minimal cryptocurrency activity before last year, and where ordinary investors with little expertise jumped in with abandon.
In South Korea, the biggest exchanges opened storefronts to make investment easier for people who didnt feel comfortable doing it online. The offices of one big exchange, Coinone, had just one customer walk in during a two-hour period in the middle of the day last week. An employee, Yu Ji-Hoon, said, The prices of the digital tokens have fallen so much that people seem to feel upset.
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.
In the United States, Charles Herman, a 29-year-old small-business owner in Charleston, S.C., became obsessed with virtual currencies in September. He said he now felt that he had wasted 10 months of his life trying to play the markets.
While he is essentially back to the $4,000 he put in, he has soured on the revolutionary promises that virtual currency fanatics made for the technology last year and has resumed investing his money in real estate.
I guess I thought we were sticking it to the man when I got on board, Mr. Herman said. But I think the man had already caught on, and had an exit strategy.
Much of the anger that investors feel is toward the smaller virtual currencies, or alt coins, that entrepreneurs sold in so-called initial coin offerings. These coins were supposed to serve as payment mechanisms for new software the entrepreneurs were building.
But almost none of these companies have delivered the software they promised, leaving the tokens useless, except as speculative assets. Several coins have been exposed as outright scams.
I think Id like to see most alts go to zero before I feel like the whole space isnt overpriced, Mr. Herman said.
Bitcoin has generally held on better with investors. It is down about 70 percent from all-time highs, rather than the 90-percent losses that lesser-known digital tokens have suffered. But it, too, has struggled to win much use beyond speculative investments.
We also saw that Bitcoin isnt ready for mass adoption and day-to-day use, Mr. Herman said.
Despite this pessimism, the social networks where cryptocurrency fanatics gather to trade information are full of people talking about their intention to hold on to their coins, in the hope that they will recover once the technology has time to catch up with the hype.
Tony Yoo, 26, a financial analyst in Los Angeles, invested more than $100,000 of his savings last fall. At their lowest point, his holdings dropped almost 70 percent in value.
But Mr. Yoo is still a big believer in the idea that these tokens can provide a new way to transact online, without the big corporate middlemen we rely on today. Many of the groups that raised money last year are still working on the products they promised, with lots of serious engineers drawn to the projects.
Theres just so much more behind this new wave of technology and innovation that Im sure will take over our society in due time, Mr. Yoo said.
With prices down so much, he said he was actually looking to put more money into the markets.
That thinking has been encouraged by the people who invested in Bitcoin in 2013, when it first topped $1,000. That bull market was followed by a crash in which the price of Bitcoin dropped more than 80 percent. But after a long fallow period, the price recovered. Even with recent losses, the value of one Bitcoin was hovering around $6,300 on Monday up more than 500 percent from the peak of 2013.
Five years ago, I was broke, unemployed, and ashamed to use my real name, Ryan Selkis, a popular virtual currency personality, wrote on Twitter last week. For the new fanatics, stick around for your own 14 month, 85% downdraft and youll not regret it.
Twitter is also filled with complaints, like the one from a user named @Notsofrugaljoey, who wrote: Its really hard to stomach losing all my hard earned money. Just broke down and cried.
On Reddit, a user in the United Arab Emirates posted a picture of the $100,000 loan that he had taken out in December to buy cryptocurrencies and that he will now be paying back out of his salary for the next three years.
Mr. Roberts, the British investor who has seen most of his $23,000 vanish, is holding on to his coins in case they turn around. But for now he has stopped trading and is looking for another job.
Im living off the little savings I have left still in my bank account, Mr. Roberts said. Ive made a mistake, and now Im going to have to unfortunately pay the cost for the next few years.
Follow Nathaniel Popper and Su-Hyun Lee on Twitter: @nathanielpopper and @esuhyuni.
Nathaniel Popper reported from San Francisco, and Su-Hyun Lee reported from Seoul, South Korea.
Interested in All Things Tech? Get the Bits newsletter delivered to your inbox weekly for the latest from Silicon Valley and the technology industry.
- Cryptocurrency trading vs. forex: The similarities and differences - AZ Big Media - June 25th, 2020
- Financial Inclusion, Cryptocurrency and the Developing World - Cointelegraph - June 25th, 2020
- Phishing and cryptocurrency scams squashed as one million emails are reported to new anti-scam hotline - ZDNet - June 25th, 2020
- 83% of BTCs addresses are smiling to the Bank - Nairametrics - June 25th, 2020
- Protesters Around The World Are Putting Their Hopes Into Cryptocurrency - Forbes - June 25th, 2020
- The Benefits of Cryptocurrency Trading Crypto Benzinga - Benzinga - June 25th, 2020
- Miners Are Sending Bitcoins to Exchanges Again and That May Be Bearish - CoinDesk - CoinDesk - June 25th, 2020
- Akon City: $6 Billion Cryptocurrency City Set to Begin Construction | News - Bitcoin News - June 25th, 2020
- UNICEF Cryptocurrency Fund announces its largest investment of startups in developing and emerging economies - UNICEF - June 25th, 2020
- NetCents Technology paves the way for mainstream cryptocurrency adoption by offering daily settlements to merchants - Proactive Investors USA &... - June 25th, 2020
- Cryptocurrency Market Share Analysis and Research Report by 2025 - CueReport - June 25th, 2020
- From Ethereum to Stellar, to Solana: Cryptocurrency Kin Confirms Blockchain Migration - CoinDesk - June 25th, 2020
- Jim Rogers Discusses Bitcoin as Money and Why Governments Will Stop Crypto | News - Bitcoin News - June 25th, 2020
- Latest News On The Cryptocurrency Market | Bitmain, NVIDIA, Xilinx, Intel, Advanced Micro Devices, Ripple, Bitfury, Ethereum Foundation, CoinBase,... - June 25th, 2020
- EY Launches First-Of-Its-Kind Cryptocurrency Reporting App - PRNewswire - June 25th, 2020
- Cryptocurrency: Redefining the Future of Finance - Visual Capitalist - June 16th, 2020
- A Cryptocurrency User Paid $2.6M In Transaction Fee To Send $136 Twice - Benzinga - June 16th, 2020
- Cryptocurrency Regulations in times of COVID-19: A boon or bane to India? - Lexology - June 16th, 2020
- Are CryptoCurrencies The Future Of Finance? - Digital Information World - June 16th, 2020
- Nevermind Coinbase Big Brother Is Already Watching Your Coins - Cointelegraph - June 16th, 2020
- Fireblocks integrates with Chainalysis to set a new compliance and security standard for financial institutions and cryptocurrency businesses -... - June 16th, 2020
- Creating A Crypto-Exchange - The Types & The Steps - YourStory - June 16th, 2020
- Cryptocurrency Market News: Bitcoin and the rest of cryptos following the global stock market - FXStreet - June 16th, 2020
- Latest Update 2020: Cryptocurrency Market by COVID19 Impact Analysis And Top Manufacturers: ZEB IT Service, Coinsecure, Coinbase, Bitstamp, Litecoin,... - June 16th, 2020
- Latest News On The Cryptocurrency Market | Intel, CoinBase, BitGo, and Binance - WorldsTrend - June 16th, 2020
- Justice Gets 15 Guilty Pleas for International Crime Ring that Laundered Money Through Cryptocurrency Exchanges - Nextgov - June 13th, 2020
- Why Bitcoin Suddenly Dropped 6% on Thursday - CoinDesk - CoinDesk - June 13th, 2020
- Cryptocurrency Mining Hardware Market Growth Trends, Key Players, Competitive Strategies and Forecasts to 2026 - Jewish Life News - June 13th, 2020
- Cryptocurrency Market News: Bitcoin drops to $9,100, the rest of the market follows suit - FXStreet - June 13th, 2020
- Due to COVID-19 Cryptocurrency Market Groundwork 2020: Provides an In-Depth Analysis on the Future Growth Prospects and Global Market Trends Forecast... - June 13th, 2020
- Binance Launches Quarterly BTC/USD Futures With Up To 125x Leverage - Benzinga - June 13th, 2020
- CashTelex Is Driving Mainstream Crypto Adoption Through Its Brand New Physical Asset-Backed Cryptocurrency CTLX - Yahoo Finance - June 13th, 2020
- Chainalysis Partners with A&D Forensics, Expanding Access to its Cryptocurrency Investigative Tools in Africa - bitcoinke.io - June 13th, 2020
- Cryptocurrency Can Become a Medicine to Treat the Challenges Caused by Covid-19 - Coin Idol - June 13th, 2020
- Global Cryptocurrency Mining Market Expected to Reach Highest CAGR by 2025 Top Players: Advanced Micro Devices, Inc, Russian Miner Coin, Halong... - June 13th, 2020
- The emerging world of cryptocurrency - Global Banking And Finance Review - June 13th, 2020
- Someone paid $2.6 million in fees to move $134 worth of crypto and oops - Mashable - June 11th, 2020
- 80% of US and European Institutional Investors Find Cryptocurrency Appealing: Survey - Bitcoin News - June 11th, 2020
- Zilliqa, the fast-rising cryptocurrency that has gained more than 845% since March - Nairametrics - June 11th, 2020
- Cryptocurrency misappropriation, hacking, theft and fraud on target for banner year - JD Supra - June 11th, 2020
- Cryptocurrency Quotes and Forecasts: Last Updates on Cryptocurrencies - FinSMEs - June 11th, 2020
- Europol busts $17 million illegal Netflix site that used cryptocurrency - Decrypt - June 11th, 2020
- Watch | What is crypto-jacking? - The Hindu - June 11th, 2020
- Cryptocurrency and Capital Gains: The Sources of Vermont Candidates' Wealth - Seven Days - June 11th, 2020
- Cryptocurrency Market 2020 | Scope of Current and Future Industry 2026 - Surfacing Magazine - June 11th, 2020
- Meet ZCash, the cryptocurrency that protects your privacy better than Bitcoin - Nairametrics - June 11th, 2020
- Riot Blockchain Continues Optimization of Mining Operations - AiThority - June 11th, 2020
- GPU as a Service Market to Witness Remarkable Gains From Cryptocurrency Mining Applications 2025 - 3rd Watch News - June 11th, 2020
- Cryptocurrency Market Update: IOTA rockets to the moon Bitcoin, Ripple and Ethereum in consolidation - FXStreet - June 11th, 2020
- The Bull & The Bear: Dispelling, Confirming Myths and Truths About Crypto - Money and Markets - June 11th, 2020
- Trio of Analysts Bullish on Ethereum (ETH) As Cryptocurrency Shows Robust Fundamentals - The Daily Hodl - June 11th, 2020
- Cryptocurrency Market Update: Bitcoin needs to settle above $10,600 to avoid the sell-off - FXStreet - June 11th, 2020
- Regulating cryptocurrency exchanges - The Indian Express - June 2nd, 2020
- Russia Sort Of Dropped The Hammer On Bitcoin, Crypto - Forbes - June 2nd, 2020
- Cryptocurrency This Week: Indian Crypto Exchanges Witness Surge In New Users, Bitcoin Sees $1000 Spike & More - Inc42 Media - June 2nd, 2020
- SEC Wins Terminating Sanctions Against Cryptocurrency Creator - Law Street Media - June 2nd, 2020
- Bitcoin hodl waves indicate 60% of the cryptocurrency is being hoarded analysts suggest a bull run could be - Business Insider India - June 2nd, 2020
- Cryptocurrencies and Online Gaming: 4 Use Cases - the blockchain land - June 2nd, 2020
- Cryptocurrency Market News: Its a sea of red in the crypto market today - FXStreet - June 2nd, 2020
- Japanese Finance Minister May Be Opposed to Lowering Tax on Crypto - Cointelegraph - June 2nd, 2020
- Bitcoin Cash Vietnam-Based Fiat-to-Crypto Trading Support Added to Bvnex Exchange | Exchanges - Bitcoin News - June 2nd, 2020
- Crypto.com Becomes the First Cryptocurrency Company in the World to Achieve ISO/IEC 27701:2019 Certification - WFMZ Allentown - June 2nd, 2020
- Todays cache | Crypto-jacking, and more - The Hindu - June 2nd, 2020
- The Ethereum cryptocurrency has risen above $250,71, showing an increase of 5% - The Times Hub - June 2nd, 2020
- Chinas Cryptocurrency Legitimate Threat to Bitcoin and Dollar - Move Your Money - June 2nd, 2020
- Latest News On The Cryptocurrency Market | Intel, CoinBase, BitGo, and... - Azizsalon News - June 2nd, 2020
- As Bitcoin Flounders, This Tiny Cryptocurrency Has Soared Over 200%Heres Why - Forbes - May 23rd, 2020
- What to Know About Billions' Cryptocurrency Drama If You Know Nothing About Cryptocurrency - Vulture - May 23rd, 2020
- Tether, the most promising stable coin, now the third most valuable cryptocurrency - Nairametrics - May 23rd, 2020
- Taxation on the Cryptocurrency - Live Bitcoin News - May 23rd, 2020
- Bitcoin Worth $282K from the 2016 Bitfinex Hack on the Move - Bitcoin News - May 23rd, 2020
- A detailed overview of Cryptocurrency Market [PDF] with innovation in technology, various aspects of the industry players, regions, types, and... - May 23rd, 2020
- Why Have Cryptocurrency Payments Failed to Take Off So Far? - Cointelegraph - May 22nd, 2020
- Cryptocurrency and COVID-19: Bitcoins Path to a Safe Haven - Cointelegraph - May 22nd, 2020
- Analysis on Impact of COVID-19- Cryptocurrency Mining Hardware Market 2020-2024 | Rising Popularity Of Mining Pools to Boost Growth | Technavio -... - May 22nd, 2020
- Top Cryptocurrency Trading Bots 2020 - Conquer The World - KryptoMoney - May 22nd, 2020
- Crypto hedge funds struggle to recover from bloodbath - Financial Times - May 22nd, 2020
- Bitcoins prices slip amid speculation that a block of the cryptocurrency possibly linked to creator Satoshi Nakamoto just changed hands - MarketWatch - May 20th, 2020
- Is 2020 the year to invest in cryptocurrency? - About Manchester - May 20th, 2020
- Ripple, third most valuable cryptocurrency, gets approval from the US for money transfers - Nairametrics - May 20th, 2020