PETALING JAYA: The cryptocurrency crash and the crypto bear market are not a drag on young investors who want to hold on to their digital investment assets.
Anthony Pang, a 30-year-old forex trader who has invested in several cryptocurrencies, said he was aware of the current bear market.
“But now I let it hold,” Pang said.
However, Pang was optimistic because most of his investment is placed in forex trading, and cryptocurrency only makes up less than 30% of his investment portfolio.
“I only consider it a loss if I cash out in this bear market,” said Pang, who did not disclose how much his assets had fallen in value.
Pang, who has been into cryptocurrency investing since 2020, advised young people not to invest everything in cryptocurrency.
“Only invest the money you can afford to lose,” said Pang, who is also a freelance model.
Bitcoin grabbed global headlines when it fell below US$24,000 (RM106,130.40), the lowest level since 2020.
This is part of a series of price drops for the cryptocurrency, which has seen a drop in value of more than 60% in the past seven months.
It was also reported that the global market capitalization fell by 12% to US$970 billion (RM4.29 trillion) on Monday (June 13).
Bitcoin day trader Muhamad Al Hafiz Hambali, 35, said he did not feel worried about the unpredictability of cryptocurrencies as he was well aware of the risk.
“I’ve spent nearly RM10,000 in less than a year. We are now facing a ‘little setback’ and I believe things will soon be back to normal,” said the shopkeeper, father of two.
He added that he got into cryptocurrency by chance and chose it from the videos he watched on YouTube.
“I find it very interesting and initially I made a lot of money,” he said, adding that it helps cover some of his family expenses.
He hopes authorities will take steps to raise awareness of the issue to make it more common and accessible to more people.
Jeffrey Halley, who works in online forex trading, said cryptocurrencies are collapsing along with other asset classes as high inflation in the United States raises fears that the US Federal Reserve could crash. embarks on a more aggressive hike in interest rates and that other central banks around the world could also do the same.
“This has been exacerbated by liquidity issues and crypto lender Celcius preventing depositors from getting their money back,” said Halley, OANDA’s senior market analyst for Asia-Pacific.
He was referring to Celsius Network’s freezing of withdrawals, exchanges and transfers.
“Well, cryptocurrencies and their spectacular rally are perhaps the most strident example of speculative excess that occurred when central banks cut rates to 0% and easing qualitatively over the course of the pandemic.
“Now that inflation is entrenched for the first time in more than 20 years and central banks around the world are tightening monetary policy, cryptos, like stocks, are facing scrutiny of their true valuations as interest rates are rising,” he said.
Understandably, there is a lot of fear in the market, with panicked sellers reacting aggressively to market conditions, he added.
“Speculators are naturally the hardest hit and, just like in 2017, you will see many such participants leaving the market, projects remaining and investors preparing for the next round,” he said.
Meanwhile, George Wong of Access Blockchain Association Malaysia said the fall was due to a combination of factors and US inflation rates, the US stock market as well as the major problem caused by Celsius all had a role to play.
Access Blockchain Association Malaysia is a non-profit organization specializing in the development of blockchain and cryptocurrencies.
However, Wong said the decline has been cyclical and it’s not the first time such a slump has occurred.
“As mentioned this happened in 2017 and you will see it happen again in the next cycle. I expect the speculators to come out as I mentioned and the fundamentally sound projects to continue to build on Bitcoin, for me, will continue to be a store of value although I see other cryptocurrencies slowly gaining dominance as Bitcoin is certainly an aging technology having been first to market,” the sub chairman added. -Committee for NFTs and Metaverses at Access Blockchain Association Malaysia.
As to whether more people are shedding their holdings due to tough economic times, he said it comes down to market sentiment and people may be trying to preserve their wealth and taking steps to reduce their losses in the face of such an aggressive downtrend.
“Many forget that many millionaires were won in the rally not too long ago and there was a lot of easy money being spent, especially in NFTs (non-fungible tokens).
“I can’t say exactly which assets are the hardest hit because it hasn’t been seen yet. I don’t think we’ve seen the bottom of the overall market, not just crypto, and which one is the hardest hit has not been seen yet. .
“I personally think commodities will be the strongest in these 1-2 years for obvious reasons, but it’s hard to predict if you’ve seen the bottom in crypto yet,” he added.
Wong advised investors not to rush into buying decisions just yet, as many things look cheap and the market could dive deeper. He went on to add that reacting “too quickly” can also lead to significant losses in the short and even medium term.
“It is important to exercise a little caution in the current market climate. Cash is really king because opportunities can arise in such a crisis and if so, there are many options in the market. .
Fundamentally sound companies or projects are particularly viable at this stage and they are easier to identify as the scam or speculative projects aggressively exit the market,” he said.