Crypto crash mental toll | The Star

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“WHERE did all the posts about Luna go? Have you guys all gone to Han River?”

This anony­mous com­ment on the Bit­coin sec­tion of online com­mu­ni­ty DCin­side cap­tures the depress­ing mood of online cryp­tocur­ren­cy com­mu­ni­ties in recent days.

The crash of Kore­an-made cryp­tocur­ren­cy ter­raUSD, also known as UST, and its sis­ter token luna, has made head­lines around the world as its impact was felt in the glob­al cryp­tocur­ren­cy market.

“Going to Han Riv­er” – a rather dark phrase often used jok­ing­ly among stock and cryp­tocur­ren­cy investors when they see big loss­es – implies a sui­cide as an escape from the sad reality.

Escape from the sad reality: 'Going to Han River' – a rather dark phrase often used jokingly among stock and cryptocurrency investors when they see big losses – implies a suicide. – Filepic/The Star Escape from the sad real­i­ty: ‘Going to Han Riv­er’ – a rather dark phrase often used jok­ing­ly among stock and cryp­tocur­ren­cy investors when they see big loss­es – implies a sui­cide. – Filepic/The Star

The key­word “Mapo Bridge” also surged in pop­u­lar­i­ty on web por­tal Naver over the week­end, accord­ing to Naver‘s Data Lab, as the price of UST and luna collapsed.

As Ter­ra saw near­ly US$45bil (RM197.8bil) evap­o­rate from its mar­ket cap, accord­ing to reports by Bloomberg, a col­lec­tive sigh was heard among investors across online spaces.

“I heard through the grapevine that an acquain­tance of mine made an extreme deci­sion (of com­mit­ting sui­cide) after los­ing all of their sav­ings through invest­ing in luna,” one tweet read.

“Every time I hear about such sad news, I’m remind­ed of the quote ‘There is no such thing as free lunch’,” anoth­er tweet read.

A video clip also went viral on Twit­ter in which Kwon Do-hyung, the Kore­an entre­pre­neur behind the com­pa­ny Ter­raform Labs, dis­cussed how most cryp­tocur­ren­cies would end up “dying.”

“Around 95% [of coins] are going to die, but there’s also enter­tain­ment in watch­ing com­pa­nies die too,” he said dur­ing an inter­view with chess stream­er Alexan­dra Botez, which drew ire from some Ter­raUSD and luna investors.

ALSO READ: Review poli­cies on cryp­tocur­ren­cy in Malaysia to keep up with the times, Gov­ern­ment urged

Psy­cho­log­i­cal impact of los­ing money

When stocks or cryp­tocur­ren­cy dras­ti­cal­ly crash, sim­i­lar to how the price of luna went from 107,844 won (RM373.30) on May 5 to 0.25 won (1 won = RM0.003) on May 17 accord­ing to dig­i­tal cur­ren­cy plat­form Coin­base, investors suf­fered a “sud­den sense of loss,” said Kwak Geum-joo, a pro­fes­sor of psy­chol­o­gy at Seoul Nation­al University.

Imag­ine if your pos­ses­sions had sud­den­ly dis­ap­peared. In the case (of luna), it was grad­ual and over the course of a few days but investors did not see it com­ing. They did not have time to pre­pare psy­cho­log­i­cal­ly for the loss of their possessions.”

Whether it is the death of a per­son who was close to you or los­ing your sav­ings, the sever­i­ty of the sense of loss can be dev­as­tat­ing and man­i­fest in var­i­ous emo­tions – rang­ing from sad­ness to anger.

A statue of a man comforting a person is placed to dissuade suicides on Mapo Bridge, a common site for suicides, over the Han river in Seoul. – AFPA stat­ue of a man com­fort­ing a per­son is placed to dis­suade sui­cides on Mapo Bridge, a com­mon site for sui­cides, over the Han riv­er in Seoul. – AFP

One cryp­to stream­er was sum­moned by police on Mon­day, May 16, over charges of tres­pass­ing after vis­it­ing Ter­ra cre­ator Kwon’s home unin­vit­ed the pre­vi­ous week. He is accused of ring­ing the door­bell and run­ning away after find­ing the loca­tion on the internet.

Anger appears to have played a role in his act as the stream­er told the press that Kwon should apol­o­gise offi­cial­ly after being ques­tioned by police.

“Kwon should pub­li­cal­ly apol­o­gise and announce plans (to com­pen­sate) using his assets or oth­er­wise,” the man told the press out­side Seoul Seong­dong Police Station.

“I know peo­ple around me who have giv­en up on their life,” said the stream­er as he called on Kwon to take responsibility.

When faced with a sud­den loss, humans try to find the cause, Pro­fes­sor Kwak explained.

“Peo­ple want to find whether it was their own fault or some­one else’s and then put the respon­si­bil­i­ty on the tar­get. In this case, it’s the devel­op­er. If you had invest­ed in stocks, for exam­ple, you could blame your­self for hav­ing done it. If you were talked into invest­ment by a bank, the blame could be on the bank clerk,” Kwak said.

“Unlike bank­ing or stock invest­ment, there is no law com­pen­sat­ing for the loss in cryp­tocur­ren­cy invest­ment. When peo­ple invest in cryp­tocur­ren­cies based on their trust in devel­op­ers, anger and hatred towards devel­op­ers are inevitable.”

The appeal of risky investment

In a meet­ing with the Nation­al Pol­i­cy Com­mit­tee on May 17, Koh Seung-beom, chair­man of the Finan­cial Ser­vices Com­mis­sion, said the prices and trans­ac­tion trends of luna and Ter­raUSD are being “close­ly watched” and mea­sures to pro­tect investors are being mulled.

In the Unit­ed States, Trea­sury Sec­re­tary Janet Yellen called for sta­ble­coin reg­u­la­tion by the end of this year fol­low­ing the Ter­ra crash.

“A sta­ble­coin known as Ter­raUSD expe­ri­enced a run and declined in val­ue. I think that this sim­ply illus­trates that this is a rapid­ly grow­ing prod­uct and there are rapid­ly grow­ing risks,” Yellen said dur­ing a recent hear­ing before Congress.

But despite warn­ings from experts, the cryp­tocur­ren­cy mar­ket is boom­ing. And the boom in South Korea is in part pro­pelled by the country’s “com­pressed” eco­nom­ic growth, said pro­fes­sor Kwak.

Ambitious: In South Korea, you can see people with land or buildings in Gangnam get drastically richer within one generation, making many young people aspiring to get rich quick without working hard, says professor Kwak. – AFPAmbi­tious: In South Korea, you can see peo­ple with land or build­ings in Gang­nam get dras­ti­cal­ly rich­er with­in one gen­er­a­tion, mak­ing many young peo­ple aspir­ing to get rich quick with­out work­ing hard, says pro­fes­sor Kwak. – AFP

“South Korea achieved its eco­nom­ic devel­op­ment in 45 years. The Unit­ed King­dom took 200 years, the Unit­ed States around 150 years and Japan 90 years. Against this back­drop, South Kore­ans are more inter­est­ed in spec­u­la­tion – pur­chas­ing an asset in hopes that it will become more valu­able in the near future.

“In this coun­try, you can see peo­ple with land or build­ings in Gang­nam get dras­ti­cal­ly rich­er with­in one gen­er­a­tion. The suc­cess sto­ry could’ve been your uncle or some­one you know. And with cryp­tocur­ren­cy invest­ment, you hear about friends you know become rich­er overnight. In addi­tion, young peo­ple do not feel they can buy a home despite work­ing hard. In a sense, cryp­tocur­ren­cy invest­ment high­lights an aspect of South Kore­an soci­ety.” – The Korea Herald/Asia News Network



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