Young Malaysian investors unfazed by cryptocurrency crash

PETALING JAYA: The crash of cryptocurrency and the bearish crypto market serves as no dampener for young investors who are willing to hold on to their digital investment assets.

Anthony Pang, a 30-year-old forex trader who invested in several cryptocurrencies said he was aware of the current bear market.

“But now, I’m letting it hold,” said Pang.

However, Pang was optimistic, as most of his investment is placed on forex trading, and cryptocurrency only comprises less than 30% of his investment portfolio.

“I only consider it a loss if I cash out in this bear market,” said Pang, who did not disclose the amount his assets have dropped in value.

Pang, who has been dabbling in cryptocurrency investments since 2020, advised youths not to invest everything into cryptocurrency.

“Invest only the money you can afford to lose,” said Pang, who is also a freelance model.

Bitcoin made global headlines when it crashed to below US$24,000 (RM106130.40), which is the lowest level since 2020.

This comes as part of a series of price crashes for the cryptocurrency, which has seen a more than 60% drop in value over the last seven months.

It was also reported that global market capitalisation shrunk by 12% to US$970bil (RM4.29 trillion) on Monday (June 13).

Bitcoin day trader Muhamad Al Hafiz Hambali, 35, said that he does not feel anxious about the unpredictability of cryptocurrencies as he is well aware of the risk.

“I have spent almost RM10,000 in less than a year. Now we are facing a ‘minor hiccup’ and I believe the situation will return to normal soon,” said the trader, who is a father of two.

He added he got into cryptocurrency by chance and picked it from videos he watched on YouTube.

“I find it very interesting and initially I made a lot of money,” he said, adding that it helped to cover some of his family expenses.

He hoped that authorities would take measures to raise awareness on the issue in order to make it more mainstream and accessible to more people.

Jeffrey Halley, who works in online forex trading, said cryptocurrencies were slumping along with other asset classes as high inflation in the United States raised concerns that the US Federal Reserve would embark on a more aggressive interest rate hikes and other central banks in the world may also do the same.

“It has been exacerbated by liquidity issues and crypto-lender Celcius stopping depositors from getting their money back,” said Halley, OANDA’s senior market analyst for Asia Pacific.

He was referring to Celsius Network freezing withdrawals, swaps and transfers.

“Well, cryptocurrencies and their spectacular rally are perhaps the most strident example of speculative excess that occurred as central banks slashed rates to 0% and qualitatively eased over the pandemic.

“Now that inflation is entrenched for the first time in 20 plus years, and central banks globally are tightening monetary policy, cryptos, like equities, are facing a reckoning over their true valuations as interest rates rise,” he said.

Naturally, there’s a lot of fear in the market with panic sellers reacting aggressively to market conditions, he added.

“Speculators are being hit the hardest naturally and much like in 2017, you will see many such participants exit the market with the remaining projects and investors building to the next cycle,” he said.

Meanwhile, George Wong, of Access Blockchain Association Malaysia, said the slump was due to a combination of factors and US inflation rates, the US stock market as well as the major issue caused by Celsius all had a role to play.

Access Blockchain Association Malaysia is a non-profit organisation specialising in blockchain development and cryptocurrencies.

However, Wong said that the drop has been cyclical and it is not the first time such a slump has occurred.

“Like mentioned, it happened in 2017 and you’ll see it happening again in the next cycle. I expect the speculators to exit, like I mentioned and the fundamentally strong projects to continue building in the market. Bitcoin, to me, will continue to be a store of value although I do see other cryptocurrencies slowly gaining dominance as Bitcoin is certainly an ageing tech having been the first in the market,” added the subcommittee chairperson for NFTs and Metaverses over at Access Blockchain Association Malaysia.

On whether more people are disposing of their holdings due to the tough economic times, he said this boils down to market sentiment and people may be trying to preserve their wealth and are taking steps to cut their losses in the face of such an aggressive downtrend.

“Many forget that many millionaires were made in the rally not too long ago and there was a lot of easy money being spent particularly in NFTs (non-fungible tokens).

“I can’t exactly say which assets are hit the hardest as this has yet to be seen. I do not think we have seen the bottom in the overall market, not just crypto, and which is the hardest hit has yet to be seen.

“I personally think commodities will be the most robust within these 1-2 years for obvious reasons but it’s hard to predict if you’ve seen the bottom of cryptos yet,” he added.

Wong advised investors to not rush into any buying decisions right now as many things seem cheap and the market could plunge deeper. He went on to add that reacting “too quickly” may also result in major short-term and even mid-term losses.

“It’s important to practice a bit of prudence in the current market climate. Cash is really king as opportunities may arise in such a crisis and if anything, there are plenty of options in the market.

Fundamentally strong companies or projects are particularly viable at this point in time and they’re easier to identify as the scam or speculative projects are exiting the market aggressively,” he said.

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Many put faith in cryptocurrency but crash could lead to regulation and new consumer protections

Max Moulder is doing whatever he can to make ends meet.

He’s taken a shot at being an Uber driver.

He’s drawing on his life-long trade of cutting and selling gemstones.

But odd jobs are not earning him enough to keep up with the growing cost of living.

“I’ve done gemstone cutting and trading for a long, long time — since I was 10 years old — that’s not paid off for me,” he said.

“It’s very difficult doing Uber driving with the cost of petrol. That’s not working. And I can’t do cabinet making anymore. So I’m running out of options really.”

In his mind, there’s just one option left: to invest in crypto.

A Caucasian male, wearing a blue polo shirt, looking at the camera.
Max Moulder bought cryptocurrency in the hope its value will rise.(ABC News)

“I feel like I’ve been forced into this,” he told ABC News.

Mr Moulder only started investing three weeks ago when the market tanked. He’s put in $1,000 so far and is willing to invest a lot more.

His view is that he’s buying cheap and so “it can only go upwards from here”.

It is faith, rather than investment fundamentals, that has left Mr Moulder, and millions of other investors around the world, either already suffering or being vulnerable to massive losses.

One in nine Australians bought crypto in the past year

Consumer advocacy group Choice has found that one in nine Australians have bought cryptocurrencies in the past year and that number is expected to keep rising.

Half of them see crypto as a long-term investment, rather than short term speculation and two in five see it as a diversification of their portfolio.

Patrick at his computer at his work office.
Choice’s Patrick Veyret says more consumer protections are needed.  (ABC News: John Gunn)

“People have really been harmed, and the system is really rigged against consumers,” said Patrick Veyret, senior policy adviser for consumer group CHOICE.

“And that’s why we’re calling for stronger consumer protections and strong obligations on cryptocurrency exchanges.”

Since November (when Bitcoin hit a record high of $US69,000), about $US1.5 trillion has been wiped off the value of the entire cryptocurrency market. That’s more than half its value erased in just six months.

Posted , updated 

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TD Bank to hand convoy funds to court as organizers turn to cryptocurrency

A Canadian financial institution has struck another blow against the attempts by the convoy group blockading Ottawa to collect on the millions of dollars it has solicited in online donations.

On Friday, TD Bank told CTV News that it would apply to surrender to an Ontario court the money that had not been refunded by GoFundMe, totalling about $1 million, as well as some $400,000 the group had accepted through direct donations.

“TD has asked the court to accept the funds, which were raised through crowdfunding and deposited into personal accounts at TD, so they may be managed and distributed in accordance with the intentions of the donors, and/or to be returned to the donors who have requested refunds but whose entitlement to a refund cannot be determined by TD,” spokesperson Carla Hindman said.

Convoy lawyer Keith Wilson said that the group planned to fight to retrieve any money they had raised — and could be seen in a video promoting the group’s next play: a cryptocurrency fundraiser that has raised almost US$1 million.

“We will be taking expedited legal steps to have the restrictions on the donated funds lifted as soon as possible,” Wilson said in an email to CTV News.

It’s another hurdle in collecting any donations for the convoy, which has occupied Ottawa for about two weeks and blocked other border crossings as a protest of vaccine mandates. The ongoing protest prompted Ontario Premier Doug Ford to declare a provincial state of emergency Friday.

Of the more than $10 million raised by crowdfunding platform GoFundMe, only $1 million was deposited, before GoFundMe opted to return the remainder of the funds.

A second set of fundraisers, set up on GiveSendGo, has reached almost $9 million as of Friday.

But late Thursday, the Ontario Superior Court froze funds coming from those accounts, after an application from the province’s Attorney-General that alleged the funds would further a criminal act: mischief on the streets of Ottawa. GiveSendGo has said the order does not apply to it and is still raising the funds.

In a video posted on Facebook by supporters, convoy organizers discuss the strategy online for fundraising, turning to a crowdfunding website that has raised $913,000 as of Friday afternoon, in satoshis, which each represent a 100 millionth fraction of a bitcoin.

“The principle philosophy of what Bitcoin is is freedom,” one says. “For everyone who had their voice stolen by “GoFraudMe”, “GoFundMe,” you should feel solace that there are now alternatives.”

According to documents filed in an Ontario court, the Ottawa Police were watching that video too. In their affidavit, an officer referenced the convoy’s cryptocurrency fundraising strategy, but authorities didn’t apply to freeze any of it.

The digital currency is decentralized, say experts, so it is difficult to regulate. This crowdfunding approach may become the norm, Erica Pimentel of Queens University said.

“I think Bitcoin is going to become the currency of social movements. And they are going to be playing international whack-a-mole trying to stand in the way of those transactions,” Pimentel said.

James Cohen of Transparency International Canada said the widely publicized use of cryptocurrency to fund what authorities have deemed an illegal act could be the catalyst for more transparency in how groups fundraise internationally.

“This isn’t new. The warning signs have been up well before this event,” he said. “This situation kind of amplifies things as all Canadians are witnessing the effects of anonymous money in real time, so there’s more momentum to do things.”

Cohen said any international money or cryptocurrency will become subject to Canadian rules as soon as someone attempts to convert it to legal tender to buy things protesters have been spending money on, including gasoline.

“They can say Canada doesn’t have jurisdiction, but the second it touches a Canadian financial institution it does have jurisdiction,” he said.

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