IWSF – Ch 219

The essence of stocks lies in the companies themselves, and companies continuously generate value.

Just because someone bought Seosung Electronics for 1 million won and sold it for 2 million won, doesn’t mean the person who bought it later lost 1 million won.

This is because Seosung Electronics announces new products every year and earns money to distribute to its shareholders.

The stock market is an open market, and it’s entirely possible for all participants to profit. That’s why stock investing is distinct from gambling and is socially encouraged.

On the other hand, the cryptocurrency market was essentially a zero-sum game. For someone to profit, someone else had to lose.

The reason cryptocurrency prices had surged until now was the belief that they would continue to rise. However, as the inflow of liquidity reached its limit, various negative events occurred, triggering a crash.

From the time Bantcoin exceeded $15,000, K Company continuously sold its holdings of the coin. Even though they haven’t sold even half of it, most cryptocurrencies have already halved from their peak.

As bargain hunting came in, and a temporary rebound succeeded, individuals once again chanted “Let’s go!”

“It seems like it’s slowly rebounding, should I stop selling?”

I shook my head at Senior Sangyeop’s question.

“Sell as much as possible while they’re buying.”

According to Oracle, this isn’t a temporary dip, but the beginning of a bubble burst.

The whales who control the cryptocurrency market were not happy about the crash. However, as we continued to sell, the rebounding market turned downward again, and some forces who couldn’t withstand it also joined the sell-off.

Taekgyu said,

“Thinking about it, it’s a funny situation. They once said that cryptocurrency was digital gold and a new currency to replace fiat currency in the future, but now they’re trying to sell cryptocurrency to buy fiat currency.”

“Dollar is still the best.”

Bantcoin even broke below the $10,000 mark, and altcoins continued to plummet. The coins that had seen the biggest gains experienced the steepest declines.

Roople, which once reached 4,500 won and climbed to become the second-largest cryptocurrency by market cap, fell below 1,000 won and became a penny coin again.

TV channels reported on the cryptocurrency crash as a major news story every day.

This isn’t the first or second time cryptocurrency has crashed. When Mount Hill went bankrupt due to hacking in the past, there was also a significant crash, but it didn’t become as big of an issue as it is now.

That’s how much the situation has changed since then.

The number of cryptocurrencies has increased, and the market has grown. Until early last year, only a very small number of people invested in cryptocurrencies. However, around the end of last year, that number increased dozens of times.

Office workers, housewives, college students, everyone jumped in. There were even cases of middle and high school students investing their allowance.

How many of these people understood blockchain and invested based on that understanding?

There’s a saying in stock market proverbs that when housewives and monks appear in the trading floor, it’s the peak.

Joseph Kennedy, the father of the 35th U.S. President John F. Kennedy, sold all his stocks after overhearing a shoeshine boy asking about stocks. Afterwards, the Great Depression occurred in the United States.

In Korea, too, after housewives carrying babies on their backs flocked to the trading floor with cash, shouting to buy KOSDAQ stocks, the KOSDAQ bubble burst. China also experienced a stock market crash after monks gathered to buy stocks.

The Bantcoin forum, until recently, was a Neverland full of dreams and hopes. But in just a few days, it turned into Avici.

-My wedding is in May, and I’ve lost not only the wedding expenses but also the jeonse money I received from my parents. My fiancé doesn’t know about this and is choosing where to go for our honeymoon and where to have our new home. What should I do now? ㅜㅜ

-I started with 300 million won of seed money, which was all my savings from running a mobile phone store plus a loan I took out with my parents’ house as collateral (I told my parents I was opening another store), and bought Zent at 533 won. Then I sold it around 1200 won, but after that, it went straight up to 2800 won haha. Anyway, in four days, 300 million won became 700 million won. That’s exactly 100 million won earned per day. But from this point on, my life started going downhill. I decided to invest in major coins instead of altcoins to invest more stably. (Looking back, if I wanted to invest stably, I should have stayed away from coins). It looked like Bantcoin would break through 30 million won, so I went in intending to make a small profit and get out, but it slid down to 14 million won without stopping. I pulled everything out and thought about going back to Zent, so I bought at 1200 won. It broke below 700 won in two days. I sold it and then saw it rebound sharply and break through 1000 won, so I went back in and got rekt. (Zent tricked me again ㅜㅜ) I lost all the money I made, and now I have 180 million won left in seed money. From this point, I tried to recover my principal by chasing rallies and buying every coin imaginable. In the end, I went all-in on Florex, and in half a day after buying, the price went from 13,000 won to 6,000 won. Now I have exactly 17 million won left in my hand. What should I tell my parents?

-I can’t even laugh at you. Stay strong.

-Doesn’t feel like it’s someone else’s problem ㅜㅜ

-Don’t lose hope. If you ride one coin well, it can go up tenfold in an instant. They’re doing an ICO for Orc Coin soon, so buy some. I even got a cash advance and went all-in.

-Finally hit -90%. I don’t feel like buying anymore, so I’m going to the Han River. It was a dirty life. See you in the next life.

-Don’t sell, just jump. At least reduce the selling pressure.

-Since you’re going to die anyway, I’d appreciate it if you could send your remaining coins to my Banthem account.

-I’d like to request that as well. Any coin is fine.

-I don’t even have money for food. Please help me. Even a little help would be appreciated.

-Stuck on the Roople 4300th floor. When will the rescue team arrive?

-Crazy lol. What were you thinking buying a coin that used to be less than 100 won at that price?

-Hehehe, Roople tricked you again.

-You sucker. Roople tricked you again?

-Do you think the rescue team can climb up that high? Even the 1500th floor is too much.

-I’m on the Bant 2730th floor ㅜㅜ Please let’s go to the moon!

-Thanks to black anguses like you, someone managed to escape, so think of it as doing a good deed. Even if this life is hell, you’ll go to heaven when you die.

-If you’re down more than 70%, there’s no point in selling at a loss. Just hodl is the answer.

-Fucking forced to hodl ㅜㅜ

Those who jumped in early were better off. However, those who joined late and got caught at the peak suffered extreme losses.

Some investors directed their anger towards the presidential transition committee that had mentioned regulations.

-Has the government ever let its citizens have happy dreams? We were able to have dreams we’d never had in Korea before because of cryptocurrency. We believe that cryptocurrency is the Fourth Industrial Revolution, so we’re investing in it. Please don’t take away the happiness and dreams we’ve had for the first time.

-Those are some great words ㅜㅜ

-Does it make sense for the government to ruin a thriving market with regulations?

-Blockchain is the core of the Fourth Industrial Revolution.

-Government, activate cryptocurrency investment and foster blockchain!

-That’s right! Let’s revive the economy with Bantcoin!

-Let’s gather the suckers and hold a rally in Gwanghwamun to demand recovery of our principal.

-When the president takes office, invest the National Pension in Ethereum and make it moon!

***

The higher the mountain, the deeper the valley.

Bantcoin plummeted by 70 percent, Ethereum by 80 percent, and most altcoins by over 90 percent.

Bubbles leave aftereffects.

People who lost their entire fortune or went into debt were common. Unfortunately, there’s no real way to help them.

One fortunate thing is that the shock didn’t spread to the overall economy.

Based on the peak, the market cap of cryptocurrencies listed on major exchanges exceeded $1 trillion. This was the total for the entire world, and Korea accounted for less than one-tenth of it.

Also, the cryptocurrency bubble burst had few connections with the existing economic system.

For example, if real estate prices plummet, it doesn’t end there; it creates problems for banks that provided loans, tenants, construction companies, contractors, and so on, negatively impacting the overall economy.

In short, the scale was small, and there were few related industries, so the shock was relatively less severe. If the cryptocurrency market cap had been larger and linked to the financial sector through collateralized loans, etc., it wouldn’t have ended like this.

Due to these points, most people thought it was fortunate that it burst now.

Due to the bubble burst, the cryptocurrency market cap shrank to $300 billion, and a period of sideways trading followed for a while.

The amount of cryptocurrency K Company sold on overseas exchanges and converted to cash was $7.2 billion. In an instant, the company’s assets increased by over 8 trillion won.

Nevertheless, there was still a significant amount of unsold supply. The mining farms were still producing coins.

Senior Sangyeop, who owned shares in K Company, was beaming.

“What are you going to do with the exchange?”

“We should invest and continue to grow it. Even though it crashed, the market itself hasn’t disappeared.”

Unlike securities firms, cryptocurrency exchanges don’t require authorization from the authorities; anyone can establish one simply by registering. As a result, exchanges sprang up like mushrooms when the investment boom occurred. Among them, there were many with low trading volume and poor security.

“Once the market stabilizes, there will be a sorting out of the good and the bad, whether it’s cryptocurrencies or exchanges.”

The emergence of the internet caused the dot-com bubble. The full-fledge internet era began, and IT companies started to grow after the bubble burst.

Whether cryptocurrencies will create value and grow again, or completely collapse as Warren Buffett said, remains to be seen.

***

When I opened my eyes, a beautiful brunette was asleep next to me.

The hectic period at Golden Gate’s Korean branch had passed, and things had become a bit more relaxed. Ellie usually rested on weekends, and we enjoyed our dates.

We went to late-night movies or went for drives in the suburbs, but most of our dates were at home. It was difficult to go out because our faces were well-known.

Like now, we often played until late and she’d sleep over at my place.

Sensing my gaze, Ellie slowly opened her eyes.

“Why are you looking at me like that?”

“Because it’s amazing.”

“What is?”

“That we’re together like this.”

If I hadn’t invested and had continued going to school, wouldn’t I have never met Ellie? Then we wouldn’t be together like this now, right?

Hearing my words, Ellie said,

“We still would have met, though? I could have gone to see Korea University with Jessica, or Jinhoo could have come to Hong Kong with Taekgyu to meet Jessica.”

“Hmm, I guess that’s possible.”

We smiled at each other before embracing and kissing.

“If you’re fully awake, shall we have some coffee first?”

“That’s a good idea.”

We got out of bed and put on our pajamas.

Opening the curtains, Ellie exclaimed in surprise.

“Wow!”

The garden visible outside the window had turned pure white overnight. And heavy snow was still falling.

Ellie stared at the scene with a dazed expression.

“It’s so beautiful.”

I walked over to her side.

“Do you like snow?”

“Of course. Like I said before, it doesn’t snow in Hong Kong, so I still find it amazing when I see snow.”

We went downstairs to the first floor to make coffee. We brewed coffee, took a cup each, and stood by the window watching the snow pile up.

Ellie said, taking a sip of her coffee,

“Winter is slowly coming to an end.”

“This might be the last snow.”

Taekgyu, who had woken up early for once, came into the living room in his pajamas.

“It’s snowing a lot. I don’t think we can go out today.”

I nodded.

“Yeah, looks like it. We’ll have to cook at home.”

“After we eat, should we make a snowman?”

“……Are you a kid?”

But Ellie clapped her hands in delight.

“Great idea! Let’s make one together.”

***

February has many events.

First, in Korea, the presidential inauguration took place. Park Si-hyeong’s five-year term as president ended, and Heo Chang-min of the New Politics Party was inaugurated as president.

The first thing he did was to launch a reinvestigation into the so-called cyber warfare unit operations and civilian surveillance, which had been problematic during the previous administration. Naturally, the National Intelligence Service and the Defense Security Command were the targets.

The New Politics Party insisted on a special prosecutor investigation into Park Si-hyeong’s various allegations (the PAS beneficial owner issue, ordering civilian surveillance, ordering conservative groups’ orchestrated protests, hidden overseas assets, etc.), while the Liberty National Party, now the opposition party, opposed it vehemently, calling it political retaliation against the previous administration.

However, the party was severely divided, the pro-Park faction’s power had weakened, and public opinion supported the special prosecutor. With various pieces of evidence and testimonies already appearing, it wasn’t easy to simply oppose it unconditionally. Eventually, the special prosecutor was highly likely to be passed in some form.

Apart from the domestic political situation, an important event was waiting for us.

It was the launch of CarOS’ new car model.