Future Tense

How Much Amateur Bitcoin Traders Are Freaking Out Now

“I woke up at 4 a.m. I checked Robinhood, finally went back to sleep, woke back up again, checked Robinhood, and then I got on Reddit.”

 A man wears a mask with the Bitcoin logo .
Bitcoin investors were hurting after a huge dip in prices on Wednesday. Sean Gallup/Getty Images

It’s been a brutal week for crypto investors. Over the past few months, cryptocurrencies had been enjoying record highs thanks in part to Tesla buying $1.5 billion in Bitcoin in February, NFTs fetching multimillion-dollar sums at auction, and people generally having ample time on their hands (plus government stimmies) to invest out of pandemic-induced boredom. Yet this surge in Bitcoin prices, which reached a high of $64,829 in April, began to weaken dramatically last week when Tesla CEO Elon Musk announced that the carmaker would no longer accept the cryptocurrency out of concern for its environmental impacts—a surprise given Musk’s recent, very vocal enthusiasm for crypto. The price then took an even steeper nosedive on Wednesday in the wake of China banning its financial institutions from providing cryptocurrency-related services. Bitcoin fell to a low of $30,066, about 50 percent below its record high, before rebounding ever so slightly. It’s still 40 percent below where it was in April.

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Bitcoin’s tumultuous fall has many retail investors evaluating whether to stick with the cryptocurrency—as well as other digital tokens like Dogecoin, which began tumbling during Musk’s recent appearance on Saturday Night Live. On Reddit, a major hub for the cryptocurrency community, users spent much of Wednesday consoling one another about Bitcoin’s tumble. To get a sense for how smaller investors are taking the news, I reached out to a Reddit user who posted about day-drinking margaritas to lessen her panic about investing in Bitcoin near its most recent high. A self-described “female investor” who lives in New York City, she works as an actress and children’s fiction writer. (And requested anonymity to discuss her crypto investing.) Our conversation has been condensed and edited for clarity.

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How did you get started buying Bitcoin?

My husband had a couple of Bitcoins. He used to make quite a bit of his money doing live events, so we had quite a bit of our income just wiped out from one week to the next when all events were canceled for the year [due to COVID-19]. We were thinking about it and we were freaking out. We’re living in New York City where, if you’re not making money, rent will just eat through your savings superquick. So then we looked at the price of Bitcoin and I think around then it was $12,000, and that had gone up significantly since my husband had bought them. We mistakenly cashed out early.

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Then I was just a little bit curious about them. I started talking to him about it more, and then I started monitoring it. I had just gotten Robinhood and was curiously looking at the price. We had a lot of regret for selling that early. I noticed this huge upward trend, and Robinhood starts to make you feel like you know what you’re doing. Looking at that, I was like, “I think that we should get some more.” It took me way too long and it doubled. By the time I bought some in July, I felt like I had maybe already missed out. I didn’t, and it turned out OK, but I was starting to get really anxious, because it was the biggest chunk of money that I’ve ever invested—like $20,000. It went up and then it started to come down, so I sold quickly. I made a good amount for the amount invested, but I didn’t hang onto it. And then it freakin’ almost doubled again. I had terrible FOMO, and I was like, “OK this thing is just going to keep going up, keep going up.” So then I bought back in at $53,000 [on Feb. 21].

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What are your feelings about the Reddit cryptocurrency community? What role did it have in your investment decisions?

Reddit does play a big part because, around this time, the GameStop things started happening. I didn’t get involved, but I got fired up because it felt like it was the little guy versus the institutions—a bunch of little guys getting together and sticking it to the man really resonated with me. I was supportive of the movement, and then I found out that a close friend of me and my husband had actually made millions from it. I firsthand know a GameStop millionaire, and so Reddit became this thing I didn’t want to underestimate. So I got involved in Doge, and I’ve been hanging on to my Bitcoin ever since I bought it at $53,000. Though there have been times I’ve been tempted to sell it, I’ve been with the Reddit community with this long-term holding.

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What was your initial reaction to the news of the crash? How did you find out?

I have a morning ritual of checking a news digest and then Robinhood. I’ve been seeing the crash since it started happening last week. When it started to dip, I wasn’t that shocked, because it had been doing that a long time. But when it started to dip drastically like two days ago, I got nervous. I talked to my husband and I was like, “What should we do?” He was like, “Well, we were going to hold long term, so really it’s like nothing has changed.” Of course, people can say that, and I understand that you don’t lose any money until you sell, but it does not feel good seeing that your investments have gone down by 35 percent in the last week. This morning, I woke up at 4 a.m. I checked Robinhood, finally went back to sleep for a couple of hours, woke back up again, checked Robinhood, and then I got on Reddit. I was trying to gauge just how many people are panic selling and trying to see what’s going on with the community. Honestly, it made me feel a lot better.

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What’s the plan now? Are you going to sell or hold? Would you buy more?

I’m not going to buy more, not right now. I remember when we discussed buying Bitcoin, it really seemed like my target was seeing it hit $100,000. Today it’s just one of those days where I’m like, “Well, that might just take a lot longer than I thought.” I don’t think it’s going to get wiped out. I can’t say that I won’t be tempted to sell if I start recuperating more of my money, just because this is stressful. I’m going to ride it out and see how it goes.

The two things that seem to have precipitated this crash were Tesla no longer accepting Bitcoin, and China stepping up regulations. Do either of those events worry you?

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I think what’s more concerning is that Elon Musk can send a tweet, and then billions of dollars are wiped off of the crypto market. It makes me speculate about whether or not Elon Musk is hustling everyone and just how far that’s going. Is he going to come out with his own coin? It just seems a little sociopathic to me. And then with China regulating it more, I think that regulation is just going to happen eventually. I do get concerned about the fact that any news can send Bitcoin into a huge dip. I think that it can survive being regulated; it’s just the initial impact of news on Bitcoin is really what’s concerning.

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How is that Dogecoin investment working out?

I wanted to be smarter about that investment. We got out our money that we’d initially invested. Now with whatever’s left, I’m just very curious to see where it goes. I don’t know how real this this community is, but I want to stand behind the Doge community for now. It was really nice when early last week, we got out all the money we’d invested and then we’re still making like six grand—six grand that was going to be just vacation money. I don’t think I’ll be upset if that one dwindles a lot, because it’s kind of been fun

Did you actually end up day-drinking margaritas today?

I didn’t, but I did smoke quite a bit of weed in the morning—California girl at heart. I chilled out a little and took my dog on a really long walk.

Future Tense is a partnership of Slate, New America, and Arizona State University that examines emerging technologies, public policy, and society.

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