Crypto Fanatics Learn ‘Don’t Put All Your Eggs in One Basket’ Lesson the Hard Way as Fortunes Wiped Out – Opinion

Bitcoin. It was inevitable.

As any serious investor in variable investments — including the out-of-control and difficult to understand cryptocurrency market — knows, any investment that can go up in a hurry can also go down in a hurry. There is a greater chance of losing than there is of gaining. After all, it’s a fundamental tenet of investing that inevitably happens — sooner or later, in cyclical fashion.

Let me begin with this admission: As a former Certified Financial Planner (CFP), I know next to zero about the cryptocurrency market, blockchains, and so forth — mostly on purpose. What I do know is that there are many things. Do you want to know?As a CFP, there are some key guidelines for investing in equity and variable markets.

  1. Don’t put all of your eggs in one basket.
  2. If it sounds too good to true, there is a chance that the investment might be too great. is.
  3. The riskier the investment, the smaller percentage of one’s overall portfolio should be placed in it.
  4. Ultimately, don’t invest more in speculative markets than you can afford to lose.

And, as a former investment advisor and portfolio manager, I know quite a bit about asset allocation, portfolio rebalancing, portfolio optimization and re-optimization, and most importantly, risk management assessment — on a per-investor basis. You get the idea.

Getting caught up in the crypto craze, ignoring all of the above basics, and throwing caution to the wind can not only lead to financial disaster — for individual investors and institutional investors alike — it is happening “as we speak.”

How bad can it get? Forbes reports that cryptocurrency markets have fallen by roughly 5%, as reported on Thursday by Forbes. $1 trillionIn value in thirty days. To paraphrase Barack Obama’s pastor, Jeremiah Wright, the crypto chickens are coming home to roost — and those chickens are destroying lives as we speak.

Bitcoin [other] cryptocurrencies have crashed further overnight, dropping to levels not seen since the crypto market began surging in late 2020 and wiping away almost $1 trillion worth of value in a month as a serious “ripple” warning comes into effect.

Yikes. But — but — but, it was a sure thing! Sorry, there is no “sure thing” in the variable markets.

Here’s more, via Forbes:

The bitcoin price has dropped to around $27,000 per bitcoin, down 12% in the last 24 hours, and dragging down the wider crypto market with other top-ten coins — Ethereum, BNB, XRP, Solana, Cardano, and Avalanche, all losing between 25% and 33%. Ethereum crashed by 22% on Wednesday afternoon.

The sell-off comes after the $18 billion algorithmic stablecoin terraUSD (UST) lost its peg to the U.S. dollar, wiping out the price of its support coin luna, which has now lost almost 99% of its value — and risks dragging the bitcoin and [other]Even lower prices for crypto markets

Forbes reports that investors panicked when bitcoin crashed to its lowest in more than one year. Others cryptocurrencies suffered even worse declines.

Victims of the crypto bloodbath — which comes amid a broader stock market rout — range from billionaire crypto titans who run leading marketplaces, to retail investors who have foolishly poured their life savings into cryptocurrencies.

Reddit post by retail investor: Suicide is the only solution, according to The New York Post.

“I lost over 450k USD, I cannot pay the bank,” reads one of the top posts on the Reddit forum for Terra Luna, a cryptocurrency that has lost more than 99% of its value over the past week. “I will lose my home soon. I’ll become homeless. suicide is the only way out for me.”

Reddit has another post that reads:

My ex-colleague attempted suicide. In 2021, he moved all his savings to crypto and LUNA was a major player in his portfolio.

The Post points out that it gets worse.

Coinbase’s shares have dropped 84% in just eight years since it went public. The company warned customers on Wednesday that their cryptocurrency holdings could be at risk if Coinbase goes bankrupt, although CEO Brian Armstrong insisted that bankruptcy isn’t in the cards.

Maybe it is and maybe it isn’t, but even Armstrong said what I said at the beginning:

I feel for anyone who has been badly beaten up by what’s happening. You shouldn’t put more into this than you can afford to lose.

Yet, as hucksters and infomercials alike continue to shill for bitcoin and other cryptocurrencies — not unlike Rosland Capital pimp William Devane incessantly pimping gold — P. T. Barnum was right: There’s a sucker born every minute.

RedState Related:

Ted Cruz Introduces Legislation for Congress to Accept Cryptocurrency and Use It in the Capitol

Joe Biden Announces He’s Coming for Your Bitcoin

Brooklyn Man Creates a Cryptocurrency Token Using Recordings of His and His Friends’ Flatulence

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