MZ Generation Tears Up Over Coins... "Fear Has Not Come Yet"

Bitcoin Halved Compared to Last November... NFT-Related Cryptocurrencies Also Plummet
Speculative Investors Show Behavior... "Number of Investors Leaving Cryptocurrency Will Increase"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] “I’ve passed the stop-loss point.” Hwang Jin-hyun (pseudonym), a man in his 30s who started investing when the cryptocurrency market heated up last November, expressed frustration as his loss rate reached 64% despite investing only 2 million KRW with a small amount. Hwang said, “I bought small amounts because the outlook for Bitcoin and non-fungible token (NFT)-related cryptocurrencies was good, but I didn’t expect the price to drop so quickly,” adding, “I think the time to sell has already passed, so I will hold onto it for 3 to 4 years.”

MZ (Millennial and Z) generation investors are shedding tears over the cryptocurrency crash. NFT-related cryptocurrencies that surged sharply in the second half of last year have fallen to levels exceeding a 50% drop. There is even speculation that if the cryptocurrency market continues to slump, speculative demand may also disappear.

According to Upbit, a domestic cryptocurrency exchange, as of 8:58 a.m. on the 26th, Bitcoin recorded 44.87 million KRW, up 0.32% from the previous day. It had fallen to 40.87 million KRW on the 24th but has since rebounded. However, Bitcoin has been sluggish this month, falling about 21%. Compared to the all-time high of 82.7 million KRW reached last November, it is about half. The last time Bitcoin was in the 40 million KRW range was about five months ago on August 8 of last year.

The decline in NFT-related cryptocurrencies that surged last November is even greater. ‘Wemix,’ a cryptocurrency issued by Wemade, has dropped 56% from its peak. Others such as Sandbox and PlayDapp have plunged 65% and 77% respectively from their highs. Sandbox even rose 40.48% in a single day last November.

Cryptocurrency investors are generally known to be composed of the MZ generation. When the cryptocurrency market showed an upward trend in the first quarter of last year, among new members of the four major domestic cryptocurrency exchanges (Upbit, Bithumb, Coinone, and Korbit), those in their 20s accounted for 32.7%, and those in their 30s accounted for 30.8%. An industry insider estimated, “Recently, due to anxiety that it may be difficult to maintain a middle-class life on salary alone, the MZ generation may have flocked to the cryptocurrency market.”

However, despite the recent significant drop in cryptocurrency prices, they do not seem to be buying at low prices. According to CoinMarketCap, a cryptocurrency market status relay site, the 24-hour trading volume of the four major domestic exchanges recorded 4.487 trillion KRW as of this day. Despite Bitcoin’s rebound, the trading volume remains significantly lower than last year. On November 17 last year, the trading volume of the four major exchanges reached about 26.7996 trillion KRW.

Investors still remaining in the market have shown investment behavior closer to gambling. An investor in a community referred to the cryptocurrency market as ‘this field’ and said, “If you truly have the ‘heart of a beast,’ you should buy cryptocurrency before the U.S. Federal Open Market Committee (FOMC) starts,” adding, “If the tightening is less than expected, it will surge; if not, there is nothing to be done.”

However, there is a view that if the market falls further, even speculative demand will disappear. It means that the market has just entered the fear stage, and if it falls further, there will be few cryptocurrency investors left. As of this day, the digital asset Fear and Greed Index operated by Dunamu, the operator of Upbit, stood at 30.99, entering the fear stage.

Professor Hong Ki-hoon of the Department of Business Administration at Hongik University explained, “Because uncertainty is accumulating, it is impossible to predict the price trend,” adding, “As the overall asset market is moving toward liquidation, the number of investors leaving the cryptocurrency market will continue to increase.”