Bay Area crypto investors face staggering losses
SAN FRANCISCO – Monday was a rough day on Wall Street, with the Dow and S&P down. It wasn't just traditional markets that took a bath, the emerging crypto markets also went underwater to the tune of $200 billion.
"My total portfolio for crypto is down $10,000," personal investor Robert Schmidt told KPIX 5.
Schmidt is one of millions who woke up Monday to a crypto market that hit the rocks. He says he wasn't surprised by the drop - that it's been a long time coming.
"The downturn actually started last November, for me. I was up last year over 600% and that was last May, so May 2021. As of now, as of today - I just checked - it was down 94%."
Investments experts said the same forces of inflation that are hitting people's wallets and the stock market are hitting crypto as well.
"Risk assets in particular get hit the hardest - so that's really what's kind of driving things," said Caleb Franzen of Cubic Analytics.
On top of that, Celsius, a major crypto exchange, halted withdrawals and transactions over the weekend leaving 1.7 million people in the lurch.
"I think they were targeted and they were harvested and that these risks were foreseeable," said the CEO of Swan Bitcoin, Cory Klippsten.
Swan, who deals exclusively in Bitcoin, said moments like Matt Damon's Super Bowl crypto ad was a familiar canary in the coal mine.
"It does seem like that's going to be a watershed moment and it's going to be very obvious in hindsight that it was very much akin the to the '99 Super Bowl with pets.com ads, et cetera," Swan told KPIX 5. "I think having Larry David, Matt Damon and Lebron [James] and all of these guys pumping crypto tokens without understanding what they were getting paid for and getting paid to do."
Schmidt said his portfolio is diverse and he isn't facing financial ruin over the crypto drop. He thinks the crypto market is ripe for regulation, with fortunes lost today.
He said any investors looking to get in should know this.
"Any money I'm putting into crypto has to be money I'm willing to lose, because that's how speculative it is," Schmidt said.