Scores of ordinary people who have invested their life savings in cryptocurrency, when the Bitcoin was surging between October and November 2017, are now "financially ruined".
The value of the Bitcoin went from $4,353, in October 2017, to over $13,860, in December 2017. As a result, the US' largest cryptocurrency brokerage Coinbase doubled customers during the period.
However, over the course of time, several contributing factors hit cryptocurrency markets and the value of Bitcoin fell to $6,926, in March 2018, as of August 20 it was trading at $6,265. The value of the market has fallen by about 75 percent ($600 billion) since January 2018.
According to a CNBC report
, an investor from the UK identified as Pete Roberts said that he invested his savings totalling $23,000 into cryptocurrencies during last winter's surge, which is now worth just $4,000. He said that his ambitions of making a quick buck led him to financial ruin.
Roberts is not the only investor to have seen this fate. Asian countries like Japan and South Korea have been particularly hit as there was hardly an activity in their cryptocurrency markets before the surge. After the value of the Bitcoin climbed, thousands of people invested their savings in the digital currency to reap profits, but failed to do so.
Kim Hyon-jeong is believed to have invested $90,000, which she accumulated from savings, a loan and an insurance policy. Since then, the value of her investments have fallen by 90 percent.
A majority of these investors said that their ire lies with smaller digital currencies, which sold tokens through initial coin offerings (ICOs). Most of these companies failed to deliver on promises made or were exposed as scams, making their tokens worthless.
Nonetheless, there were thousands of investors who are willing to hold on to their coins in the hope that the constant volatility will change and prices of the digital currency would rise.
Tony Yoo, a financial analyst based in Los Angeles, invested about $100,000 in cryptocurrency last year, the value of which declined by 70 percent at its lowest point. He is optimistic and said that many of these companies are perfecting their technology and software, roping in "serious engineers" to deliver better services to investors.
He is willing to invest more money in digital money, as prices are extremely low.
Most of these investors hold Bitcoins and had first invested in the technology in 2013 when it crossed $1,000. In spite of the recent fall, the value of a Bitcoin is around $6,500, which is over 500 percent than its price of 2013.
Experts told Cointelegraph
that volatility in the cryptocurrency market can be attributed to factors like the digital currency has no intrinsic value as they do not sell a product nor return dividends. There is no regulatory oversight as most governments are against the technology and most investors are in it for the short term. Excluding financial advisors and retail brokers, most of the investors in digital currency are young and inexperienced, and reportedly operate with a herd mentality, which greatly influences the market.
Original Source: https://www.moneycontrol.com/news/business/cryptocurrency/cryptocurrency-investors-lose-thousands-of-dollars-but-many-hope-value-may-rise-2865021.html