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The Old Adage “Don’t Put All Your Eggs in One Basket” Comes Home to Roost in a Devastating Way for Crypto-Investors

Bitcoin. It's inevitable either way, sooner or later. Any serious investor who invests in variable investments (including the out-of-control and difficult-to-comprehend cryptocurrency market) knows that any investment that can rise quickly can also be wiped out quickly. The more potential gains, the higher the chance of loss. It's an essential tenet of investing that is inevitable either way in a cyclical manner. 

 

Let’s start with this statement of an old certified financial planner (CFP) who knows almost nothing about cryptocurrency markets, blockchains, cryptos, and the like–most of the time intentionally. What this ex-CFP does know are the following key rules to invest in variable markets: Do not put all your eggs in one basket. Investments that sound too good to be true are. The riskier the investment, the less of one's portfolio should be put into it. In the end, don't invest more in markets than you can afford to lose. 

 

Being involved in the crypto-craze while ignoring the basics above and abandoning caution altogether will not just result in financial catastrophe for investors of all kinds, including institutional investors. This is taking place “as we speak.” How do you feel about this? According to Forbes, the market for cryptocurrency has dropped by $1 trillion in just 30 days. To quote former President Barack Obama's pastor, Jeremiah Wright, the crypto-chickens are returning to lay their eggs–and the chickens are taking over lives right now.

Bitcoin and other cryptocurrencies plunged further overnight, falling to levels that have not been experienced since the cryptocurrency market started to explode in the latter half of 2020 and wiped out nearly $1 trillion in value in just a month when an alarming “ripple” warning came into the market. Yikes. But…it was guaranteed! Sorry, there's no “sure thing” in the uncertain markets.

Here's more via Forbes: The price of bitcoin has fallen to about $27,000, a decrease of 12 percent in 24 hours. The price is also pulling down the overall crypto-market. Other top-ten currencies, including Ethereum, BNB, XRP, Solana, Cardano, and Avalanche, lost all lost between 25 and 33 percent. Ethereum has sunk 22 percent since Wednesday afternoon.

The price drop comes after the algorithmic Stablecoin worth $18 billion TerraUSD (UST) lost its peg against the U.S. dollar, wiping out the value of its support coin Luna, which has lost nearly 90 percent of its value and is now at risk of dragging Bitcoin and other crypto-markets further down. As reported by Forbes, the crypto-market was in a panic on Thursday, when bitcoin plunged to its lowest level since the start of the year. Other cryptos suffered even more severe sell-offs.

The crypto-bloodbath victims, occurring in the midst of a larger stock-market crash, vary from billionaire crypto-titans who control major marketplaces to retail investors who recklessly poured their entire savings into crypto.

One retail investor wrote the following on Reddit and said that the sole way to get out of his mess was suicide, as per the New York Post. “I lost over 450k USD, I cannot pay the bank,” says one of the most popular posts in the Reddit forum for Terra Luna, a cryptocurrency that has lost over 90 percent of its value in the last week. “I will lose my home soon. I'll become homeless. Suicide is the only way out for me.”

Another Reddit post: “My ex-colleague attempted suicide. He had basically transferred all his savings into crypto by 2021. LUNA was a major participant in his portfolio.”

The situation is getting worse, as reported in the Post. The shares of Coinbase, the largest publicly traded cryptocurrency exchange, have dropped 84 percent since the company became publicly traded in April 2021. Coinbase warned its customers that their investments could be in danger should Coinbase fail, but CEO Brian Armstrong has insisted that bankruptcy isn't on the table. Perhaps it is, and perhaps it's not. As Armstrong stated, “I am sorry for anyone who's been severely beaten to death by the current situation. It's not wise to invest more money into this than you're willing to lose.”

But as hucksters and infomercials continue to promote Bitcoin and other cryptocurrencies, similar to Rosland Capital William Devane incessantly pimping gold, P. T. Barnum was right: A sucker is born every second.

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