“The Crypto Industry Has Lost Its Innocence”: Individuals in Trouble

“It’s like a casino, it’s very hard to stop playing.” Olivier, 27, works in the banking sector. He took his first steps in cryptocurrency in 2017, and increased his stake during the Covid crisis: “I had a feeling they would go too far.” After breaking his savings account, he purchased 4,000 euros worth of cryptocurrencies and invested another 15,000 in products linked to these new digital currencies. “Within a few months, I doubled my bet. It’s exhilarating, you feel like a superhero, and smarter than the market.” However, the search for deals encourages people to go for products with increased risk, acknowledges the young CEO. “I didn’t have the intelligence to leave with my winnings. There, I lost 17,000 euros,” he admits disappointedly.

Amid total euphoria last fall, the market has since plummeted. Crypto star, Bitcoin, lost 40% of its value in six months; Its number one competitor, ether, is down 55%, and some cryptocurrencies, like Luna, have almost seen their value evaporate. Olivier isn’t the only one experimenting with these crazy roller coasters. Because, in ten years, the number of cryptocurrency investors has grown, and their profiles have diversified significantly. Long the playing field of a few tech-savvy fans, cryptocurrency has gradually attracted star entrepreneurs from Silicon Valley (Jack Dorsey, Elon Musk…), traditional financial institutions (BlackRock, JPMorgan…), and then the general public. People. The Adan/KPMG study revealed that 8% of French people have already invested in cryptocurrencies or NFTs, more than those who own stocks.

As they jump into the Matrix, these little porters find themselves immersed in the strange and colorful El Dorado. Picture of apes, punk, retro game metaverse, crypto-geeks world was born, and it shows. “It’s like being in a manga or a comic series. It attracts a lot of young people who have found funding to be an old dad,” explains Alexandre Paradis, a financial analyst at brokerage IG France. This mysterious world has its own terms and symbols: we talk about itAir drop Based on burning, We post memes about whales (rich in cryptocurrency) or bears (in reference to alcohol market, alcohol market).

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This highly interconnected community offers anyone devilishly simple trading tools. With just a few clicks on your smartphone, you can buy, sell and above all keep track of the fluctuations of your portfolio. “It’s so addictive, you check your phone all the time. Values ​​can triple in one day, it’s a hell of adrenaline,” says Paul*, a young entrepreneur from Lille. Tools that do little to keep you calm, as they constantly highlight missed “good deals.” “I bought $20,000 worth of cryptocurrencies in the early days of bitcoin, when it was still $200. When it got to $450, I sold it for a huge hike, but if I waited until the end of 2017, I would have earned close to 2 million euros. I admit I find it difficult to absorb this story”, admits Jean-Marc, the 50-year-old businessman who also recently returned nearly €80,000.

“We learn in pain”

In the realm of cryptography, individuals must navigate eccentric beasts as eager utopians rub shoulders with petty thieves and seasoned crooks. Florent*, 30, confirms. They come to crowd the barge on Instagram or TikTok, dangle gold pipes or promised tokens for wow… then empty the money into the pocket ASAP.

Those who do not fall for these scams soon encounter another difficulty: the cryptocurrency market is too complex to understand. a lot of stablecoins For example, giving netizens a false sense of security, by playing on the idea behind each corner It was a $1 reserve, when the mechanics are actually much more complicated than that.

The developer, Arnaud* systematically immerses himself in white papers detailing the operation of the blockchains associated with the cryptocurrencies in which he invests. “Out of the 10 launched projects, 9 are crashes. Little by little we learn – and often agonize – to evaluate and understand market cycles.” When everyone is afraid, buy, when ecstasy prevails, sell, so the saying goes. “I am making little progress, but I am still useless. tradeHe says humbly.

“Even when you know the financial markets well, it is not easy,” reassures Alexandre Paradis, an analyst at IG France. This is absolutely true since many foreign platforms are not required to inform their customers of the risks of their products. “The influences of influence, for example, are greatly revealed by the people who have ventured into it,” the expert analyzes. The promise of this mechanism is tempting: you’re betting on more than you have. “With 1,000 euros and leverage x 100, you can invest 100,000 euros,” Alexandre Paradis explains. But there is of course another side. The analyst explains: “If the market records a slight decrease, for example 1% on leverage x 100, your positions will be cut off automatically, and you will lose every 1,000 euros. This happens a lot.”

These characteristics explain why some small carriers find themselves in sensitive situations today. “Many members have incurred losses ranging from 40 to 60%,” says Hermès, a YouTuber who created a community of 20,000 people around his channel Les Rois du bitcoin. All in all, these are newbies who arrived with one idea: Maximize their winnings in A short time, which leads to human tragedies.” Keen to diversify his investments, Gerrard, a 50-year-old Parisian, saw the value of his crypto investment halve: “I invested 30,000 euros mostly in bitcoin and ether now worth about 17,000, so I lost quite a bit.”

“We are at the mercy of the big investors who are coordinating”

The situation is even worse for those who have ventured into such bizarre projects as Luna, who broke her face. “Too many people bought to destroy and burned their fingers,” notes the Hermes YouTuber website. In addition to economic losses, there is also a kind of disappointment in society. Many crypto messengers saw it as a shield against inflation. For them, the hangover is painful. “They saw that the sector was affected just as much, if not more, by the price increases that decided to fight price slippage,” Alexandre Paradis said.

The arrival of the traditional financial players into their court also makes many individuals embittered. “The sector has lost its charm and innocence,” said Judge Paul, 30, of Lille. It must be said that these heavyweights have incomparably more sophisticated means to predict and benefit from price movements. “We are at the mercy of a group of big investors who are coordinating to create a cryptocurrency evolving in a weak market, before abruptly withdrawing, making significant gains in the process and provoking a devastating public panic for the most humble people,” notes Nicholas, a 30-year-old engineer.

However, many young porters remain surprisingly enthusiastic in the storm. “We’re at a point where projects that aren’t robust enough are dying, which is unpleasant, but the technology itself retains its full potential,” says Paul. After going through a stage trade Frantic, the young entrepreneur, like many of his colleagues, joined the ‘community scammers‘, (from HODL coding slang, for Wait for dear life), who have decided not to touch their cryptocurrency for years, and are betting on the very long term. It’s true that a growing number of them have already had previous coding crashes, especially in 2018. This isn’t the first rodeo.

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*Names have been changed.


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