Cryptocurrency proponents are promoting the technology as a potentially revolutionary new form of money. It may well be that one day, although currently, they are used more as speculative investments than as a medium of exchange for goods and services.
There are many stories of successful crypto investors. However, it can be unstable even at the best of times, which it definitely isn’t. As the speculative market appears to be collapsing, many crypto investors are now eyeing a big loss. This includes Youtube and social media star Logan Paul, who is considering a half-million dollar loss and counting.
The cryptocurrency market was worth around $3 trillion last November. However, it has since fallen to around $1.51 trillion, according to Reuters, a drop of almost 50%. Bitcoin, for example, is below $26,000 for the first time since 2020, and less established cryptocurrencies like Luna and TerraUSD have completely crashed. YouTube star Logan Paul is one of many crypto investors feeling the pain, revealing he’s lost around $500,000 so far. He’s not even the only big YouTube star contemplating a crypto loss, with Paul saying his parent company, KSI, has lost over $3 million and is still going strong.
“Now is not the perfect time to get fully involved in crypto,” Paul said, summarizing the implosion in crypto value. However, he was also unfazed by the loss, calling it “a bump in the road” and reaffirming his faith in technology. While that might sound flippant, Bank of America 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 rising interest rates rather than an intrinsic problem with the crypto market itself.
For his part, Logan Paul, who recently revealed his own investment market idea, encourages other crypto investors to stay 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 to express this opinion. Many experts believe Bitcoin can rebound if its value stays above $21,000. Cryptocurrency still has a long way to go before it gets closer to this potential tipping point.
Cryptocurrency remains a somewhat controversial topic. A few large companies accept crypto payments. However, there is still not a lot of established infrastructure compared to other forms of exchange, and many remain skeptical that crypto will ever become mainstream. This is not helped by the perception that crypto stocks have more to do with marketing and groupthink than traditional economic forces. And that doesn’t even get into environmental concerns and the effect of cryptocurrency mining on the e-supply chain.
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Source: Dexerto, Reuters
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