Current:Home > FinanceAmid the hype, they bought crypto near its peak. Now, they cope with painful losses -FutureWise Finance
Amid the hype, they bought crypto near its peak. Now, they cope with painful losses
View
Date:2025-04-14 04:33:39
For Michelle Milkowski, who lives in Renton, Washington, one thing led to another.
Because her son's daycare closed in the early days of the pandemic, she had some extra cash. So, like millions of other people, Milkowski downloaded the Robinhood trading app.
Back then, the stock market was at the beginning of what would become a record-setting run, and Milkowski's new pastime became profitable.
She kept trading shares, but in early 2021, something else caught her eye: Milkowski noticed the value of Bitcoin had reached $60,000.
"I just couldn't believe it," she says, noting she first heard of the popular cryptocurrency in 2016, when its price was less than a hundredth of that. "I felt like I'd just missed the boat, because I could have bought it before it skyrocketed."
Last spring, Milkowski took another look at Bitcoin, and she took a leap. "Better late than never," she remembers thinking.
First, Milkowski bought $500. Then, $10,000. By the end of last year, Milkowski estimates, she had spent close to $30,000 on crypto.
In hindsight, the timing was terrible.
Like many first-time investors, Milkowski bought digital currencies as they were approaching all-time highs, and as companies were spending tens of millions of dollars on marketing to broaden crypto's appeal.
Quarterback Tom Brady and his wife, supermodel Gisele Bündchen, starred in an ad for FTX, and a commercial for Crypto.com featured Academy Award-winning actor Matt Damon.
These were designed to appeal to a potential investor's fear of missing out.
"Fortune favors the brave," Damon says. The ads included little-to-no explanation of crypto, and how risky the unregulated asset is.
About two weeks after that Crypto.com ad debuted, Bitcoin set a new record: $68,990. Today, it's less than a third of that.
Although its backers long claimed it would be a hedge against high inflation, that hasn't proven to be the case. As inflation has surged, Bitcoin has fallen in tandem with high-growth tech stocks. Rising interest rates have made speculative assets less appealing, and cryptocurrencies are no exception.
Milkowski, who is a manager for a large insurance company, says those ads and the "crazy exuberance that surrounded crypto" appealed to her.
"You know, that gives it some sort of approval that not just scammers are using it," she says. "Then, I felt safe to try it out, to put my money in there."
Milkowski ended up branching out from Bitcoin, into Ethereum, Shiba Inu, and Luna, a so-called "stablecoin" that collapsed quickly and catastrophically in May.
Early on, Milkowski resolved not to risk more than she could afford to lose, and Ramiro Flores set the same ground rules when he bought Bitcoin for the first time in 2018.
"I like gambling. I go to Vegas quite a lot," he says. "So, I was like, 'Hey, you know what? Like, this is just like a little trip to the casino.'"
Flores, who used to be a firefighter in Edinburg, Texas, remembers talking about cryptocurrency in the firehouse. After he did some research, he bought $2,000 worth of Bitcoin.
At its peak, the total value of cryptocurrencies worldwide was about $3 trillion. Today, it is about $1 trillion.
Flores calls the downturn heartbreaking, but it hasn't shaken his resolve.
"It's totally a bummer," he says. "But I have faith."
Flores has continued to buy Bitcoin and Ethereum, and he says he believes they will bounce back. Eventually.
He is also optimistic wider adoption of digital currencies will lead to changes to banking and the economy.
"Right now, I'm down some money, but I'm like, 'Hey, if I don't sell, I don't lose out.' I don't lose that money, technically," he says. "So, I'm just going to keep on riding this little roller coaster that we're on."
For Milkowski, the ups and downs — well, especially the downs — got to be too much, and she decided to get off.
"There's definitely peace that comes with just selling off such a volatile asset," she says. "I don't have to worry, 'Am I losing $500, $1,000 today?'"
In May, Milkowski cashed out completely. She decided to cut her losses, which ended up being around $8,000.
veryGood! (17)
Related
- 'Malcolm in the Middle’ to return with new episodes featuring Frankie Muniz
- Who won? When is the next draw? What to know about Powerball this weekend
- Russia strikes Odesa, damaging port, grain infrastructure and abandoned hotel
- Woman arrested after 55 dogs are removed from animal rescue home and 5 dead puppies found in freezer
- All That You Wanted to Know About She’s All That
- Government should pay compensation for secretive Cold War-era testing, St. Louis victims say
- Biden says he'll join the picket line alongside UAW members in Detroit
- The Halloween Spirit: How the retailer shows up each fall in vacant storefronts nationwide
- Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
- Student loan borrowers face plenty of questions, budget woes, as October bills arrive
Ranking
- B.A. Parker is learning the banjo
- 5 hospitalized after explosion at New Jersey home; cause is unknown
- WEOWNCOIN: The Emerging Trend of Decentralized Finance and the Rise of Cryptocurrency Derivatives Market
- All students injured in New York bus crash are expected to recover, superintendent says
- Taylor Swift Eras Archive site launches on singer's 35th birthday. What is it?
- College football Week 4 highlights: Ohio State stuns Notre Dame, Top 25 scores, best plays
- Former President Jimmy Carter makes appearance at peanut festival ahead of his 99th birthday
- Judge asked to decide if Trump property valuations were fraud or genius
Recommendation
Trump wants to turn the clock on daylight saving time
Man sentenced to life again in 2011 slaying of aspiring rapper in New Jersey
U.K. to charge 5 people suspected of spying for Russia with conspiracy to conduct espionage
A fire in a commercial building south of Benin’s capital killed at least 35 people
Could Bill Belichick, Robert Kraft reunite? Maybe in Pro Football Hall of Fame's 2026 class
Who won? When is the next draw? What to know about Powerball this weekend
Did she 'just say yes'? Taylor Swift attends Travis Kelce's game in suite with Donna Kelce
Breakers Dominika Banevič and Victor Montalvo qualify for next year’s Paris Olympics