Is crypto over? Is this the end of the world? And most importantly – will I ever eat steak again?
With bitcoin down about 13% in the last 24 hours, and closer to 34% for the week, these are questions that a lot of people are asking themselves for the very first time. 2020 and 2021 saw a huge wave of new entrants into cryptocurrency, thanks first to sheer boredom, followed by the kind of get-rich-quick rubbernecking that turns everyone into a crypto expert every three years or so. To pick just one metric out of a hat, active Bitcoin wallet addresses have grown by roughly 35% since the start of the pandemic in March of last year.
David Z. Morris is CoinDesk’s Chief Insights Columnist
It’s inevitable that a lot of these new entrants still have a limited understanding of the extremely nuanced technology behind true cryptocurrencies, or of the speculative and often head-spinning theories about how and why they will transform society. It’s not surprising or even particularly blameworthy. Whether we’re talking about crypto or stocks, most people just want to go to the beach, eat some ice cream, and occasionally FOMO into a hot asset they heard about on the internet.
That is, of course, a great way to stay poor. But new entrants to the 2020 crypto bull market have been indoctrinated in an even better approach to losing all your money: speculative day trading. I might not go so far as to call him Patient Zero, but Barstool Sports CEO Dave Portnoy is certainly the most prominent and emblematic vector here. He started livestreaming his stock day trading early in the pandemic and then aped into crypto during the summer of 2020.
And I mean aped. Portnoy, to be fair, has been fairly self-aware about his dunderheaded crypto shenanigans, most recently declaring, “I have no idea how this works,” while putting $40,000 into alleged Ponzi scheme Safemoon on Tuesday. Now, 24 hours later, he’s down about $15k on that bet. Portnoy also sold all his bitcoin last August, at around $11,500, after holding it for a whole week. He then bought back bitcoin two weeks ago at $48,000.