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Crypto meltdown due to ‘avoidable dot-com era errors’

Bitcoin fell below $20 000 on 18 June for the first time since December 2020. It has plummeted around 60% this year. The overall crypto market has slumped to around $900 billion, down from a record $3 trillion in November. Photo: Supplied/Ventureburn
Bitcoin fell below $20 000 on 18 June for the first time since December 2020. It has plummeted around 60% this year. The overall crypto market has slumped to around $900 billion, down from a record $3 trillion in November. Photo: Supplied/Ventureburn

While the latest crypto meltdown leaves punters bruised and bewildered, a fintech giant has warned major firms to stop making obvious, avoidable mistakes that destabilises the industry and causes financial chaos for investors.

Nigel Green, the now controversial chief executive of the deVere Group, describes himself as a digital asset advocate. He launched deVere Crypto, a once pioneering cryptocurrency exchange, early in 2018.

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Reuters reports that Bitcoin fell below $20 000 on Saturday, 18 June for the first time since December 2020. It has plummeted around 60% this year. The overall crypto market has slumped to around $900 billion, down from a record $3 trillion in November.

The tumble has left individual investors across the world bruised and bewildered.

Avoidable dot-com era crypto errors

Nigel Green, chief executive and founder of the deVere Group. Photo: Supplied/Ventureburn

Green says in a media release, “I’m not in the habit of throwing shade at other companies, but in recent times we’ve seen many of the biggest players make huge, unnecessary mistakes. They went for enormously expensive TV ads, jumped on highest-tier sponsorships, rolled-out lending models offering astronomical interest rates on crypto deposits, and launched unprecedented hiring sprees.

“Now, what do we have? Firms laying-off swathes of staff, freezing client withdrawals and cutting back on investment. Unfortunately, these brands have made some classic, obvious and avoidable dot-com era errors.”

According to Green these mistakes destabilise the industry due to the contagion effect, exacerbate financial chaos for investors and the pain of job losses for so many who were hoping to have a rewarding career in the future of finance.

“Such crypto firms would be better off – for the sake of their clients and the wider industry – growing through investing in top talent, innovation and development, and lobbying for sensible regulation with financial watchdogs.”

Green’s comments follows less than a month after the FSCA, South Africa’s Financial Sector Conduct Authority, slapped Green with a R2.5 million (about $158 000) fine.

The regulator said in an enforcement action notice that Green was a director of Brite Advisors South Africa from 2008 until 2015. It said in his capacity as director Green failed to comply with following financial sector laws.

Meanwhile, many investors are angry at United States crypto lender Celsius.

Reuters reports that Jeremy Fong, a civil aerospace worker who lives in England, believed Celsius was an ideal place to stash his digital currency holdings. This, while earning some spending money from its double-digit interest rates along the way.

“I was probably earning $100 a week,” says Fong whose crypto – about a quarter of his portfolio – is stuck at Celsius.

The New Jersey-based crypto lender froze withdrawals for its 1.7 million customers last week, citing “extreme” market conditions, spurring a sell-off that wiped hundreds of billions of dollars from the paper value of the cryptocurrencies globally.

Despite the crypto price drops, like many long-term crypto investors the deVere’s Green is still accumulating Bitcoin.

“I’m using the volatility as a buying opportunity; I’m topping up my investment portfolio at a lower price point. I’m confident that digital, global, borderless, decentralised, tamper-proof, unconfiscatable money is, inevitably, the future.”

ALSO READ: Crypto and blockchain can drive financial inclusion

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