In the wake of this week’s crash, the top post in the Reddit forum /r/CryptoCurrency was about how to contact a suicide hotline, apparently a response to distress on the part of recent investors.
Some economists say this is a familiar pattern.
“Twenty years ago, the technology stocks and new Internet stocks achieved an excess valuation of $7 trillion because of speculation,” said David Kotok, chairman and chief investment officer of Cumberland Advisors. “The prices of shares were bid up to very high levels. When they collapsed, investors … they got very hurt. We see similar characteristics in cryptocurrencies right now.”
Bitcoin investors know this trend as well.
“I think [cryptocurrencies] are highly speculative,” Kotok said. “Putting money into cryptocurrencies is a speculative thing to do. You might make a profit, but what we are seeing is people who — in the last month or two — put money into bitcoin, are having trouble getting cash back when they sell and are now watching the price fall and panicking.”
Read the complete article at WPSU Radio