The first two years after the corona crash were characterized by euphoria in the markets. When the corona broke out, this suddenly sent the markets very far down, and on the way back up, many new investors jumped in. Crypto exchanges and investment apps made it easier for anyone to invest, both in stocks and crypto. Many young people then took the plunge and started investing. At its peak, Bitcoin, the most popular cryptocurrency, was worth NOK 530,000 per coin. The coin is now worth around NOK 160,000. Illustration: ALEXANDER SLOTTEN / news – Last year there was a sharp rise. Crypto rose just like that, says Torbjørn Bull Jenssen, one of Norway’s foremost experts on cryptocurrency, and head of the crypto company Arcane Crypto. – But prices turned around, largely driven by rising interest rates. As prices began to reverse, the vulnerabilities began to become visible. This resulted in the collapse of several major players in crypto, he explains. Bull Jensen believes that what is happening in the crypto world now could be a good washing out of bad actors from the industry. Photo: Arcane Crypto / Arcane Crypto 2022 has been marked by bad news for crypto investors, and last week it culminated in the spectacular collapse of one of the very largest crypto exchanges in the world, FTX. Spectacular crash FTX was the world’s third largest crypto exchange, with over a million users as recently as last autumn. But revelations about very poor operations and illegalities brought down the company in a few weeks, and FTX is now bankrupt. Sam Bankman-Fried is the founder behind FTX. Photo: SAUL LOEB / AFP The extent of what has happened to FTX is not yet clear, but the more details that are revealed, the more spectacular it appears, writes The Economist. – You don’t know everything that has happened yet. But you have seen enough to know that this is pure fraud, says Bull Jenssen. The man who took over from Bankman-Fried and is set to clean it up, John J. Ray III, says in a report that he hasn’t seen anything worse in his entire career. This is the man who cleaned up after Enron, perhaps the biggest financial scandal in history. – The company is run by a small group of inexperienced, unsophisticated people, he writes in the report. Several media have called it the “cryptocalypse” and predict that this is the beginning of the end for crypto. It is not the first time crypto’s doom has been predicted. Illustration: Alexander Slotten / news Young investors still have faith Several young people news has spoken to are now sitting with large unrealized losses due to investments in crypto. A loss is not realized until you sell out. Technically, you have not lost your money until you have sold out. – I’ve lost a good deal in crypto, and it often feels like everything I put into it drops the second I’ve become part of it, says Nicolai Strand (20). Nicolai believes that losing money is an expensive but necessary way to learn to become a better investor. Photo: Privat – I think many people recognize this. But Nicolai sees this as a lesson, and uses the experience he has gained through crypto to become a better investor. – What separates those who lose and win in the long run is whether or not you give up, he says. He says that he will not give up. Not losing faith in crypto What is common to most of the young investors news has spoken to is that they have not given up faith in crypto. – What is very interesting is that you could think that people lost faith in this sector as a result of this here, but that is mostly not what we see, says Bull Jenssen. He explains that the difference between the other collapses in the crypto market and FTX is that the collapses earlier this year were driven by a financial crisis logic, but in FTX’s case it was outright fraud. FTX turned out to be outright fraud, the crypto expert believes. Photo: DADO RUVIC / Reuters The investors understand this, he believes. – This was a collapse of a bad actor, an intermediary. What hasn’t collapsed is Bitcoin and Ethereum. It is very clear that the narrative in the crypto community has become that this is a black eye for the industry. But it reminds us what the point of this was. Namely not to trust the intermediary. Lost NOK 30,000 The young people news talks to describe that they started with crypto to make money quickly, but that they eventually became convinced of crypto’s social value. The very technology and idea behind crypto still inspires them. – When I bought crypto, I thought it would be a short-term investment, and that my money would multiply tenfold in a few days, says Alexander Graal (19). – This was not right. Now I have changed my way of thinking to see it as a slightly more long-term investment, he says. news has seen evidence that Graal has an unrealized loss of NOK 30,000 on its crypto investments. Illustration: ALEXANDER SLOTTEN / news – I am still positive and still think that crypto is a good investment. The different cryptocurrencies have different uses, some currencies are better than others. Investing in cryptocurrencies is a high-risk investment, and you just have to accept this, he says. Sebastian Brevik has 65,000 followers on TikTok, where he talks about finance and crypto, and started a Discord group about crypto with 3,000 members. Brevik believes the decline will be short-lived and still buys crypto weekly. Photo: Privat Also because he started it as a way to make quick money. – It started as speculation, but now I see the need for cryptocurrency. In particular, the fact that it is decentralized and that you have power over your own money is very positive, says Brevik. He is also optimistic about the future despite bad times now. – You notice that there is less activity in Discord now, many put crypto on the shelf in times like this. But Brevik does not think the decline will be long-lasting. – People say that crypto is dead, but they have said that several times before. Both in 2017 and 2019. Brevik says that cryptocurrency goes in cycles and is experienced as very volatile, meaning that the price fluctuates a lot both up and down. – This volatility will probably decrease over time as more people own crypto. Bitcoin and several other cryptocurrencies will rise from the ashes again, Brevik believes.
ttn-69
