Steep drop in cryptocurrency creates panic


Thomas Kim

Bitcoin has crashed before, but the crash of stablecoin has investors worried.

Thomas Kim, Page Editor

Cryptocurrency is what many believed to be the next big technological advancement in the world, but a recent crash has created uncertainty regarding the future implementation of crypto.

“Personally, I think crypto should be widely utilized in the future, for example customers should be able to pay with crypto at their local supermarkets. Crypto is certainly more secure because each and every transaction is encrypted with powerful algorithms, and when you compare transactions with fiat currencies, crypto is clearly more secure. Since we are moving to a more digitized world, we should take advantage of blockchain technology and switch from fiat currency to crypto currency, for a more secure future,” said Pranav Subbaraman (‘23).

Although cryptocurrency holds promise as a future idea, it does not seem possible due to its volatility. This recent crash in early May destroyed almost $1 trillion worth of value in the crypto market. It wiped away all progress since the beginning of the crypto revolution. 

“I felt like the crash was unexpected because it is not affected by inflation, and one of the main purposes of crypto is that it is not affected by the government or economy,” said Stephen Gao (‘23).

The United States is experiencing a 41 year high of inflation at 8.5%, and crypto is following suit despite having a decentralized system. Most notably, Bitcoin has dropped below $30,000 which is a 60% decline since peaking just below $70,000 in November 2021. 

“I think that people shouldn’t invest in Bitcoin because it is very risky and hard to tell if a drop is coming or not,” said Gao.

The scariest aspect of this drop is not Bitcoin, as it has fluctuated up and down by thousands in the past years, but the crash of TerraUSD and Luna. These coins are supposedly stablecoins which means they hold a relatively stable value, but the combined staggering drop contributed to $64 million lost in the cryptocurrency market.

“Although crypto appears to be very volatile with significantly fluctuating values, I think it would be relatively stable as more people use it. Right, now we are seeing a drop in the values of a lot of crypto currencies, but I certainly don’t think this is permanent; I definitely think the value of different crypto currencies will recover and grow rapidly in the future, and as more companies accept crypto for payments for example, I think its value will increase,” said Subbaraman.

Crypto was highly marketed towards young investors hoping to strike it rich at the beginning of a revolution, but it has left many in shambles. Although massive drops in the crypto market have occurred in the past, there is a mix of investors holding their shares and quickly selling them.

“I saw people on Reddit were talking about suicide because the drop was so bad, and it has created a lot of panic, especially among the younger generation,” said Myra Qin (‘23).