Created: May 12, 2022 11:25 PM
ROCHESTER, N.Y. (WHEC) — In the Crypto world, more than $200 billion was erased in one day as many cryptocurrencies plunged. Several factors are being blamed on the current market crash. News10NBC found out why.
Financial experts tell us it all boils down the instability of a crypto investment that was originally thought to be stable. This particular market has always been very risky for investors, and traders.
"With the current events, anyone who is over-leveraged, or has an over position may be feeling a little bit of pain right now," said Bitcoin NYS Co-Founder Gary Palmer Jr.
Crypto market investors are in a panic right now watching almost all of their entire investments disappear in a blink of an eye. Palmer said investors have been buying more cryptos than they could actually afford. One cryptocurrency in particular, Terra Luna.
"They were over invested into Luna, and then the price went down, any you know they put a little bit more into it not understanding the full situation," said Palmer. He continued, "All the money they put into that you know subpar cryptocurrency has been lost."
Palmer has been investing in cryptos for years. Although he's seen some losses over time his investments are solid and spread out over different cryptocurrencies.
"We're completely unaffected, and you know the way that we see it you know Bitcoin is up huge numbers where it was a year ago, or even a couple years ago," Palmer said.
This week, Coinbase, one of the largest crypto trading platforms has been the subject of bankruptcy rumors. Millions of their active users have recently left, and sales have declined. Brighton Securities Chairman George Conboy weighs in on what could happen.
"So if Coinbase goes bankrupt there's no FDIC insurance for anything you have invested through Coinbase. what happens is if Coinbase goes bankrupt the creditors of Coinbase would seek to take all of those assets, and anyone who has investments in Coinbase quite possibly could lose their entire investments," Conboy said.
He also says traditional stock investors shouldn't worry about their investments being tied to the crypto market.
"Most established brokerage firms do not do anything with crypto because brokerage firms are in a very regulated industry, and that is not an area where brokerage firms have the ability to buy cryptos for clients," Conboy said.
As far as withdrawing what you have in your crypto account, it depends on who you ask. Some financial experts say take it all out, while others say sell off what you don't need, and stick it out with the rest.
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