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Crypto disasters... Surgeon in Massachusetts loses his nest egg on TerraUSD

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  • Crypto disasters... Surgeon in Massachusetts loses his nest egg on TerraUSD

    From the Wall Street Journal today.... A surgeon in Massachusetts loses his nest egg from crypto investments. This reminds me of Buffet's saying that you don't know who is swimming naked until the tide goes out. Right now, the tide is going out.

    I have always been afraid to invest in crypto, because it felt like investing in an idea that newer electronic versions of money will be better than the current electronic versions of the old standby state backed currencies (all the ways we currently can use our USD accounts to pay for things electronically). The idea of anonymity, less regulation, and freedom from central bank control is interesting, but also scary when you start talking about risking real money in that idea. And the energy requirements and the clunkiness of using crypto also feel like huge negatives.






    Here is an excerpt from the WSJ article, as there is a paywall.

    https://www.wsj.com/articles/terraus...=hp_lead_pos10

    TerraUSD was touted as a blue-chip cryptocurrency. Now its investors are reeling from painful losses and asking if it was all a get-rich-quick scheme.

    A surgeon in Massachusetts can’t stop thinking about how he lost his family’s nest egg. A young Ukrainian considered suicide after losing 90% of his savings. Other investors have given up dreams of starting new businesses or quitting their day jobs.

    All of them were swept up in the mania for TerraUSD, whose total value swelled to $18 billion before collapsing earlier this month. The coin’s sudden downfall is a reminder that crypto—which enjoyed a huge bull market last year—is often little more than a casino, with weak regulation and few means of recourse for the losers.

    The crash caught many investors off guard because TerraUSD was a stablecoin, designed to maintain its value of $1 per coin. Unlike bitcoin, which has crashed repeatedly in its short history, TerraUSD was pitched as a harbor from volatility. It slipped below $1 earlier this month and was trading around 3 cents on Friday.

  • #2
    I bought $300 in 100 dollar increments 9-10 months ago through my paypal account. Just checked, it's worth $176. Ouch my fomo! Should have used that to help pay down my rental.

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    • #3
      Terra was also a ponzi. Many others are similar and will have similar results. BTC and ETH aren’t ponzis but will be affected when these others come undone.

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      • #4
        you left out the part where a surgeon in mid 40s had amassed a nest egg of a whopping $177k

        maybe he was generally not good about his money

        play stupid games, win stupid prizes

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        • #5
          Originally posted by jacoavlu View Post
          you left out the part where a surgeon in mid 40s had amassed a nest egg of a whopping $177k

          maybe he was generally not good about his money

          play stupid games, win stupid prizes
          And the article described it as his life savings.

          I hope the good doctor pays us a visit so we can help him.

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          • #6
            It’s almost like some of us have been saying the cyrpto zealots are crazy.

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            • #7
              Originally posted by VentAlarm View Post
              It’s almost like some of us have been saying the cyrpto zealots are crazy.
              i been saying bitcoin not crypto for a long time. Jim’s recent podcast guest strongly reiterated the same. Dumb people still gonna play with shitcoins, and also gonna equate “crypto” all the same. When the fact is essentially everything besides bitcoin ranges somewhere between an unregistered security and a pure scam or joke/meme.

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              • #8
                Originally posted by VentAlarm View Post
                It’s almost like some of us have been saying the cyrpto zealots are crazy.
                and i doubt this guy was a “crypto zealot”. He was just a naive or dumb guy who bought into the hype and chased the ponzi yield bc he was probably like a lot of other folks realizing they’re way behind where they should be in terms of savings at this point of their life and seeing a grossly unstable macro environment and diving in without understanding something.

                if he was a zealot he’d also have a bag of other shitcoins like eth, solana, hex, and probably some nfts too

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                • #9
                  btc and eth is a ponzi scheme.



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                  • #10
                    I feel sorry for the Ukrainian guy, as I can see why in his situation he'd find stablecoins appealing (as it's probably tough for him to open a bank account in a foreign country and fill it with dollars or Euros). But as far as the others go: why is the point of "investing" in a crypto coin supposedly tethered to the value of the US dollar when you can just hold US dollars? If the coin works as promised, it will not rise in value unless the dollar does. And if it doesn't work as promised... well, we saw how that worked out.

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                    • #11
                      This should be a life lesson for a lot of people in crypto. As soon as a stablecoin becomes unstable, you get out.

                      I only lost 3 percent but gained over 10 with farming. People who were waiting were stupid. Lot of opportunities to remove at a small loss.

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                      • #12
                        Originally posted by artemis View Post
                        I feel sorry for the Ukrainian guy, as I can see why in his situation he'd find stablecoins appealing (as it's probably tough for him to open a bank account in a foreign country and fill it with dollars or Euros). But as far as the others go: why is the point of "investing" in a crypto coin supposedly tethered to the value of the US dollar when you can just hold US dollars? If the coin works as promised, it will not rise in value unless the dollar does. And if it doesn't work as promised... well, we saw how that worked out.
                        it’s actually not all that simple for foreign citizens in many places to get dollars. As I’m sure you can imaging. That’s why tether is so big.

                        to be clear tether and regulated stablecoins like USDC and GUSD been just fine through all this maintaining a value right at $1.00

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                        • #13
                          I've always thought it curious that many of those who advocate cryptocurrencies say they will replace the dollar as an exchange medium. If that is the case then why are they all quoted in their value as worth so many $? To me that means they have no intrinsic value.

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                          • #14
                            Originally posted by udrag14 View Post
                            This should be a life lesson for a lot of people in crypto. As soon as a stablecoin becomes unstable, you get out.

                            I only lost 3 percent but gained over 10 with farming. People who were waiting were stupid. Lot of opportunities to remove at a small loss.
                            if you’re in an unstable stablecoin, well, I’d say you’re not really in a stablecoin

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                            • #15
                              I empathize with these people. I know many people who got hurt by crypto. I was one of the lucky ones who bought in early and got out in time to make a decent profit. My brother-in-law was also a believer and bought in very early, but he doubled down on alt coins at the peak so he's hurting alot. My sister-in-law placed all of her taxable brokerage money into GTBC and is down 50% now. I still believe in bitcoin but the volatility that I see, jumping up and down 10% easily based one person's tweet is just ridiculous. You can see a glimpse of the utility for bitcoin during the Ukarine-Russia war, how Ukraine received hundreds of millions $ worth of donations via bitcoin. A decentralized currency has its appeal.

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