Did you YOLO some cash into the cryptocurrency market on the advice of some celebrity or influencer? Bad news: That money is gone now. On Monday, the cryptocurrency market experienced one of its worst crashes yet, with Bitcoin and Ethereum slumping to their lowest prices in nearly two years. Major trading platforms have locked up, supposedly stable coins have destabilized, and it’s likely that the market has not yet found its bottom, meaning there is a lot more money to be lost.
Cryptocurrency as an asset class has been trending down for some time now. NFTs, once the belle of the ball, saw activity decreased by more than 90% from their peak. It turns out it may have been the canary in the coal mine for crypto as a whole. The next warning sign was Luna, the ninth-largest cryptocurrency by market capitalization, which crashed to zero and erased $45 billion in value last month. Now it’s the supposed “prime” cryptocurrencies, Bitcoin and Ethereum, that are taking their turn in the barrel — and the experience has their investors over one.
Bitcoin is trading at more than 60% below its peak, which was reached in November 2021. Ethereum, the biggest “alt” coin which has been the foundation for much of the NFT movement, is also way down, hitting its lowest point in more than a year and tanking 75% of its peak value. More than $1 billion has exited the cryptocurrency market in just the last 24 hours, and the drain is going to continue.
So-called “whale” investors, the people and institutions with massive amounts of cash tied up in crypto, are getting out and liquidating their holdings. And they’re bringing the market down with them. While cryptocurrency has been held up as a way to democratize and decentralize money, the fact is that most of the wealth is held by a small elite class (more than one-quarter of Bitcoin wealth is owned by just 0.01% of the cryptocurrency’s holders). While the big guns liquidate to lock in what is left of their gains, it’s everyday folk who get stuck eating their losses.
Remember when stock trading app Robinhood locked retail investors out of selling their GameStop stock as the price tanked? The same thing is happening in the world of crypto. Binance, the largest cryptocurrency exchange in the world, locked people out from withdrawing their Bitcoin as the market crashed. Cryptocurrency lender Celsius did the same, locking in nearly $8 billion of assets and preventing people from getting their cash back while the market tumbled.
It’s not just investors who are getting screwed here. The crash — caused largely by rich people cashing out — is costing people jobs too. BlockFi, a major cryptocurrency lending platform, announced that it would lay off 20% of its staff because of market conditions.
The people who get out — a.k.a. the people who have enough money invested that their decision to pull out can adversely affect the market — are not you. You are the person who is desperately trying to get your money out, only to be greeted by a message saying transactions have been restricted. You are the one who is left holding the bag.
This is always how the cryptocurrency market was set up to work. The Elon Musks of the world tell you to buy Dogecoin because it’s the future of currency. While cash pours in and the price skyrockets, the big investor locks in the profits by selling off their holdings. When the price comes back down — and it always comes back down — you are holding Dogecoin while Musk is holding real cash. The system works, just not for you.
This news is republished from another source. You can check the original article here.