Why Graham Stephan Thinks the Latest Crypto Crash Is ‘Different’

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Investors may want to heed Stephan’s warning.

Important points

• Graham Stephan is an investor and YouTube personality.
• He has been investing in cryptocurrencies since 2017.
• He has a warning about the latest crypto crash and why it’s different from previous downturns in the industry.

Most cryptocurrency investors are aware of the recent market crash. The decline was dramatic, with the total value of the cryptocurrency market falling from close to $3 trillion at its peak to just under $1 trillion.

The market has been volatile before, but some investors believe this time is different.

One of those investors is Graham Stephan, a YouTube personality and real estate agent who often talks about saving and building wealth. Stephan recently took to Twitter to share his thoughts on the crash, and his predictions for the future of the cryptocurrency industry.

Here’s what Graham Stephan has to say about the recent crypto crash

Stephan started his Twitter thread by making it clear that he has long been a fan of cryptocurrency and that he has had a personal stake in virtual coins since 2017. But while he says he has seen large price swings before and acknowledges that “ups and downs are part of the market,” he believes that this major downturn is completely different – and is only “the tip of the iceberg.”

Stephan warned that “irresponsible leadership and influence have led to a crypto crisis,” which he doesn’t think will abate anytime soon for two main reasons.

The first problem Stephan identified is that cryptocurrency platforms were largely unregulated and they took advantage of this lack of oversight to take out loans against customer funds, which they later used as collateral to borrow more.

The result is that some platforms became so overleveraged that when customers began to panic in sales during the downturn, they had to freeze withdrawals. Stephan blamed this phenomenon for the downfall of Celsius, Voyager and 3AC.

The other issue Stephan pointed out was “unforced errors” including Celcius hiding hacks and accidentally returning millions of dollars worth of tokens, and Voyager making large loans to 3AC without proper collateral.

Stephan’s warning is an important one that investors should heed. It touches on some of the same issues mentioned by billionaire Mark Cuban, who commented on the recent crypto crash that companies without a solid business model are likely to disappear permanently during the downturn because, “as [Warren] Buffett says, “When the tide goes out, you’ll see who’s swimming naked.”

What does Stephan think you should do to protect your money?

In light of the fundamental problems with crypto platforms that Stephan points out, investors who are still interested in this asset class may wonder what they should do to protect their funds while buying virtual currencies.

Stephan gave some advice on this as well. Specifically, he had four suggestions, including checking for fraud at the user level; move your long-term crypto holdings to cold storage; use several different platforms to make crypto investments; and make sure you don’t invest more money than you can afford to lose if things go wrong.

This is solid advice, especially the warning that you shouldn’t invest money you count on. Financial experts including Suze Orman have also warned against making crypto investments with money you can’t afford to lose.

Whether or not Stephan is right about the underlying issues that will result in continued problems in the crypto sector, it is crucial to remember that the lack of regulatory oversight and the high volatility of this unlisted asset class makes crypto a riskier investment than many others. out there. That doesn’t mean you should walk away, but caution is necessary — and you should make sure you’re also putting money into traditional, time-tested assets.