The latest cryptocurrency crash is all anyone’s talking about these days.
After the stablecoin TerraUSD (UST) became unpegged to the US dollar earlier this month, the value of its affiliated cryptocurrency (what everyone refers to when they talk about LUNA) fell by more than 99%.
In what has been a difficult downturn for cryptocurrency investors, many have lost vast sums.
Some have even lost their life savings, leading to growing concern of a rise in suicide ideation and reckless behaviour.
Even for the uninvested and uninitiated, watching the coin free fall was a startling spectacle (you can read more about how it here, here, here and here).
The crash was a sobering reminder of the harsh downsides in the crypto market.
Against this backdrop, I spoke to Broderick Elisha Sim, founder of MissionDAO, for his thoughts on the crash.
The 29-year-old first started trading in cryptocurrency some five years ago, but his current work is within the NFT market, where there is “some but not a lot of correlation” with the broader crypto market.
Using his expertise in blockchain to start a decentralised autonomous organisation (DAO) for missions giving, MissionDAO uses the money from NFT art sales to support digital and traditional missions.
With regard to crypto, Broderick admitted that it is an “exciting asset class”, but pointed out that the flipside is that the novelty and innovation of its coins and companies mean that “the upside and the downside are incredibly high”.
The decentralised, unregulated nature of cryptocurrencies also means that they are considerably more volatile as an asset class.
“In my opinion, we’re seeing the early stages of this market,” offered Broderick.
“We will see new players moving up to the front of the pack, old players solidifying their dominance or losing their influence.”
Some principles for wise investing
Pointing to market cap and sentiment as reasons why crypto assets are highly volatile, Broderick had a clear piece of advice for would-be investors.
“With cryptocurrency, I’ll say only invest what you’re willing to lose,” he said.
“Some of these companies are start-ups that began a couple of years ago, and with any new companies there is always a risk of them going out of business.”
Broderick then drew from his insights in the area of NFT, sharing how Yuga Labs, “the biggest player to date”, is not even a year old.
In markets as speculative as these, Broderick recommends only investing money you can afford to lose.
“In my personal books, I mark my NFTs to zero when I buy them,” he shared.
“If you’re a retail investor, buy NFTs to enjoy the art, access, community and utility. Making money out of trading NFTs is not for everybody.
“The number one lesson I learnt in the last year is to not act hastily and to involve the Lord in every decision. Don’t get caught in FOMO.”
What about those who got burnt?
Broderick shared that he knows friends who have lost everything, friends who have gotten into debt – but it wasn’t the end for them.
Having the right perspective and response are what counts in tough times.
“It will sound incredibly cliche by now, but the Lord can and will restore,” he affirmed.
“Our God is not just the God of the mountaintop, but He’s also the God of the valley,” Broderick said.
“He’s close to those who have a broken and contrite spirit.”
While not all of us may have lost money in the market of late, we may well know someone who has.
Broderick’s advice was simple: “If you have loved one who lost a lot of money in this crash, withhold judgement.
“They’re already beating themselves up. They’re already condemning themselves. Don’t aid the work of the enemy in condemning someone you love.
“Instead, be a safe space for them. Let your words build them up and not tear them down.”
And if you have lost money in the market recently, we would also like to encourage you that there is hope and help available.
Speak to someone you trust about the struggles you are facing and don’t give up.
Get help if needed and take each day at a time.
What does wealth mean to you?
At times like these, it’s worth revisiting the question of what wealth means to us.
To Broderick, wealth means a lot more than having money.
“I’ll go one step further and say that it’s even more than health, for all that we have on this earth is perishing,” he remarked, pointing to the temporal nature of life and our possessions on this side of eternity.
“And this is eternal life, that they may know You, the only true God, and Jesus Christ whom You have sent.” (John 17:3)
“Jesus defines eternal life,” said Broderick. “Life to its fullness here is found in knowing God, not just intellectually, but experientially.
“To me, wealth is found in the enjoyment of the presence and the person of Father and Jesus.”
Disclaimer: The content is not intended as a recommendation to purchase or invest or as a substitute for professional financial advice. Always seek the advice of your financial advisor, do your own research and assess affiliated risks.
- What does wealth mean to you?
- What are some principles you adopt when it comes to investing?
- Know anyone who got burnt in the market recently? How can you be an encouraging presence to them in this time?
