Cryptocurrencies are also down for a while since HBO talk show host Bill Maher referred to them as a “joke”, “Easter Bunny cartoon cash” 😣, and worst of all, “a way to launder money.”
We’re not sure how he can say that. It’s not like cryptocurrencies are under heavy scrutiny for their ability to be used by criminals to launder money.
The Washington Post reports that more than $1 trillion has been wiped off the notional value of cryptocurrencies such as Bitcoin and Ethereum in just a few months based on data from the website CoinMarketCap.com.
Is Bill Maher Wrong About Crypto?
The crypto boom has been down for a while since HBO talk show host Bill Maher referred to it as a “joke” and “Easter Bunny cartoon cash,” urging his viewers to get out.
Overall, Bitcoin has fallen more than a third from when Maher took the stage. To put it another way, Dogecoin has fallen more than half from its peak.
Cryptocurrency owners, particularly those in their 20s and 30s, are the most likely to suffer losses.
Approximately 31% of those ages 18-29 who have used or purchased a cryptocurrency have done so compared to just 8% of those ages 50-64.
According to a University of Chicago poll, cryptocurrency traders from ethnic groups other than Caucasians and women may also be suffering more losses. They make up 44% of the cryptocurrency traders.”
Cryptocurrencies are making investing more accessible to a wider range of investors, which is a good thing,” Angela Fontes said at UC in July.
Before the crypto crash, millennials were already worried about their retirement.
72% of them were concerned that they wouldn’t be able to achieve a financially secure retirement in July, according to the National Institute for Retirement Security.
A majority of respondents said they were more concerned about their retirement prospects following the Covid crisis.
Because of a confluence of factors, especially high student debt, millennials are expected to face fewer retirement prospects. However, if the aftermath of the Covid crisis results in higher wages, they may be able to benefit.
The Crypto Market Crashed, What Happens Next?
Since cryptocurrencies were first invented over a decade ago, their prices have risen and fallen repeatedly.
This means that cryptocurrencies, in aggregate, still have a total notional value of $1.7 trillion, implying that owners have collectively “created” that much money from nothing.
Bitcoin’s price is still six times higher than it was five years ago, but whether it can be converted into fiat money or cash is another issue.
Cryptocurrencies have, incidentally, suffered a reversal since the start of the year concerning their claims that they are a safe haven — “digital gold,” as some have described them.
During the same period that the S&P 500 SPY, -0.49% stock index fell 7% and the bond index AGG, +0.33% fell 2%, Bitcoin BTCUSD, 0.85% fell 26%. Meanwhile, gold GLD, -1.29% rose 1%.
The standard argument in financial planning is that young people, those in their 20s and 30s, have the most time to recover if they lose money on speculation and investment. But this is an unsound argument.
The money you lose on investments when you’re young may be more costly than the money you lose later.
You’re much less likely to invest when you’re young, and the money you invest when you’re young has the most potential for growth.
By the time you’re 65, a single dollar invested at age 30 and earning 5% will be worth $5.50. However, by the time you’re 50, it will be worth only $2 and change.
The stock market has historically returned an average “real” investment return of 5% per year, which means 5% above inflation.
Crypto Crash: How to Pick the Best Time to Sell Your Coins
What happens if the cryptocurrency market fails to recover? Likely answer: Finger-pointing, lawsuits, and largely pointless new regulations.
As reported in the Washington Post article,
“The “crypto crash” has put pressure on Washington regulators to impose stricter rules on the industry — and raised fresh questions about the dangers of cryptocurrency for the average investor.
“You’re going to get more people calling their elected representatives, generally unhappy about crypto or feeling they were wronged in some way,” said Ian Katz, managing director of Capital Alpha Partners, a Washington policy analysis firm. “All regulators and members of Congress want to appear to be alert behind the wheel, and if this turns out to be a continued bloodbath, it increases the impetus for action.”
The irony is that crypto fans like the alleged freedom of these currencies from political and legal systems.
In a similar way, Washington passed the Sarbanes-Oxley Act after the dot-com crash, to protect the general public from financial fraud and the ruthless capitalism they loved when they thought they were making money.
Bernie Madoff’s years of fraud were not prevented by these regulations, and the subprime bubble and ensuing financial collapse were not prevented either. Having said that, from my personal experience, it has been a great disincentive for analysts, economists, and other financial experts to speak to the media.
In regards to crypto, anyone who’s lost money should multiply how much they lost by about 5. That’s how much their future retirement funds have been drained of.
Via this site.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
