Crypto Investor Lost His Savings After Cryptocurrency Market Crash
Sean Russell, a cryptocurrency investor lost his savings after entering the crypto market. Mr. Russell did not use to invest in the stock market. Indeed, he had very little experience on it. But in November 2017, he decided to enter the crypto world and invest $120,000 dollars into Bitcoin (BTC).
November was the month when the cryptocurrency market started to rally. His $120,000 suddenly were $500,000, quite surprising.
He commented about the bull market:
“I think there was one morning where I woke up, where I made about £12,000 ($15,600) in one morning on my investment and it just kept going. I was thinking, wow, that’s mortgages paid, that’s holidays that I’ve always dreamed of.”
But his dream did not last long. Russell works as a property developer in the United Kingdom (UK), buying and selling homes after fixing them up. When he invested in the crypto market, Bitcoin reached $20,000 in December. However, now, the famous virtual currency is being traded close to $6,300 dollars.
In order to mitigate losses, he decided to invest in other virtual currencies such as Ethereum (ETH), or XRP. However, the strategy was only worse. He lost 96% of his initial investment.
Indeed, since its all time high, XRP lost more than 90% of its value. Bitcoin, instead, has lost over 70%.
However, Russell is not the only investor that lost such an important amount of funds while trading virtual currencies. Michel Rauchs, a cryptocurrency and blockchain researcher at the Cambridge Centre for Alternative Finance, said that during the bull run in 2017, new investors placed their funds in the market.
He said that everyone entered the space, including retail investors, students and even housewives. The media played an important role in misinforming the audience. They were saying that buying virtual currencies was a unique opportunity… but most of the investors bought at the top of the market.
After the crash (which still keeps until today), experts and analyst are discussing what will happen with virtual currencies and where they are headed.
Benedetto De Martino, a behavioral economist at University College London, said that the frenzy that we seen and the volatility in cryptocurrency prices, is similar to other financial bubbles that happen in the past.
Different important figures from the financial and traditional economic world have warned users about the severe risks related to investing in cryptocurrencies. For example, Warren Buffet and Jamie Dimon commented very negatively on virtual currencies.
The last week, cryptocurrency prices plummeted even further after rumors related to Goldman Sachs dropping its plans to launch a cryptocurrency trading desk.
However, the investment bank explained that they did not take such a decision and that these reports were ‘fake news.’ Clearly, the cryptocurrency community was very excited about it, but these developments usually take long time to be prepared,
Additionally, the U.S. Securities and Exchange Commission blocked several proposals related to Bitcoin exchange traded funds (ETFs).
Despite the loss Russell experienced, he remains in the cryptocurrency market.
“I have to be hopeful about something,” he stated. “I need to keep my mind occupied, because when I just focused on the money I lost, it destroyed me mentally and emotionally.”