For many of those millennial “bitcoin Bandits,” the news is bad. Kids, if the crypto crash worsens, you may have no choice but to labor for a living.
The same as the rest of us. Yes, it’s a pain.
Young people’s aspirations of a simple, early, and wealthy retirement took a hit this week as the value of their beloved cryptocurrency plummeted. Bitcoin BTCUSD, 2.08 percent, and other futuristic “currencies” were trading at all-time lows on Wednesday.
Anyone who purchased bitcoin since February has already lost money. The most well-known digital currency has lost about 40% of its value since its peak.
Unless the fall abruptly reverses—and who knows, it might—a whole new generation may be exposed to the sad, harsh, and unpleasant truth: Unless you are extremely fortunate, there is no simple way to wealth and early retirement.
Meanwhile, the crypto meltdown may have ramifications for the rest of us, including the vast majority of people who have never purchased a cryptocurrency, may not even know what one is, and are unconcerned about it.
That’s roughly the same as the combined market value of Procter & Gamble PG, +0.04 percent and Johnson & Johnson JNJ, +0.25 percent. It’s worth more than the combined market capitalizations of J&J, Pfizer PFE, -1.30 percent, and Moderna MRNA, -5.23 percent, as well as the whole market capitalization of Spain. No, seriously.)
Because a portion of these cryptocurrencies were not owned by anyone, some of this wealth never existed, even in people’s minds. The bitcoin or whatever digital keys have been lost for a long time. Despite this, a substantial number of traders and speculators believe they are far “poorer” than they believed they were just a week ago.
This has the potential to affect the stock market. Traders who are feeling poorer have less money to invest. Traders who have suffered significant losses may lose their excitement.
The same speculative mania that propelled cryptocurrency upward in 2020 and early this year also propelled the stock market higher. Hot money poured into “hot” equities such as Tesla TSLA, +1.28%. It’s now flowing freely again. Tesla’s stock has fallen in tandem with bitcoin’s price over the last month.