Crypto crash: a failed crypto Kiwi, a portfolio down by 90% and risk of layoffs

James Rohloff is well acquainted with the dangers of the crypto market.

During the 2021 gold rush, he helped launch a coin that had a brief time in the sun, jumping 300% in value, before collapsing to be worth a tenth of a penny.

His personal crypto portfolio also increased in value last year, but is now worth only 10% of what it was at the top.

He has a simple method for dealing with the current recession, which has so far resulted in some of the world’s largest crypto exchanges laying off hundreds of employees, lenders freezing transactions, and the value of bitcoin falling by more than 70%.

“It’s better to just not look at it, because it doesn’t feel that good,” he says.

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James Rohloff, along with his family, started the Laybuy buy now pay later scheme.

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James Rohloff, along with his family, started the Laybuy buy now pay later scheme.

Rohloff won’t say exactly how much the cryptocurrency crisis has cost him personally, but he says that if he had been able to sell at the peak of the market, he would have made enough profit to buy a nice car.

Live by the rule of investing only what you can afford to lose. He invested a modest amount each week and had the advantage of buying early, so even though his portfolio is down 90%, it’s only worth 10-15% less than when he first invested.

Like many of the converts, he believes it’s all part of the ebb and flow of a volatile market.

He still invests, saying it is now about timing the bottom of the market to buy more, in order to profit from the next bull run.

A different kind of shock

Crypto crashes have happened before, but Paul Quickenden, Easy Crypto’s head of operations in New Zealand, says this time is different.

It’s the first time a recession has hit at the same time as an economic one (think price inflation, rising interest rates, and the specter of a recession).

Second, there are many more large institutional investors active in the market today than ever before, with banks, hedge funds and even KiwiSaver schemes investing.

Quickenden says the sector welcomed the influx of big investors because it drove prices higher, but that means sentiment driving other markets now has a tight grip on cryptocurrencies as well.

Easy Crypto New Zealand boss Paul Quickenden says the platform has processed more than a million orders and transacted more than $1.7 billion since its inception.

RICKY WILSON/Things

Easy Crypto New Zealand boss Paul Quickenden says the platform has processed more than a million orders and transacted more than $1.7 billion since its inception.

This, he says, is one of the main reasons why cryptocurrencies are aligning themselves with stock markets, pension funds and the real estate market, and act much more like a technology stock than advocates of “security assets.” safe harbor” they often claim they are.

Signs suggest that the good times may be over for cryptocurrency exchanges. San Francisco-based exchange Coinbase recently announced that it intended to lay off 1,100 workers and the CEO of Crypto.com says the exchange will lay off 260 people.

Quickenden says that Easy Crypto is more protected because it does not work like a classic exchange, but sits between buyers and sellers, charging a fee for brokerage trades.

He says the company is not considering layoffs, but that could change.

“We’re tied to the market, so I can’t say we’ll never have to downsize,” he says.

Possible ‘mass extinction’ event

Easy Crypto has seen a shift towards more people wanting to sell than buy as people freaked out from falling prices.

“There’s an interesting tension in the market, some people think it’s the end of the world and others think it’s the buying opportunity of a lifetime,” he says.

Quickenden remains positive for the long-term outlook for cryptocurrencies, but predicts a “mass extinction event” for what those in the industry call “shitcoins” — coins released without a solid app or feature.

With roughly 17,000 cryptos or tokens currently in existence, there is potentially a lot to throw away.

Rohloff says that once the next bull run begins, it will be those coins that had value and utility that will remain and thrive.

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Rohloff says that once the next bull run begins, it will be those coins that had value and utility that will remain and thrive.

The “frenzy” of 2021

Rohloff was the COO of a Kiwi startup that launched one such token, called Unvest, a product originally intended to allow investors with locked-in interests in other cryptos to trade them before they are vested.

In September, its tokens were opened to trade at 10 cents, according to Coinmarketcap.com.

The token jumped to trading for as much as 30 cents quickly, but in early January they were worth less than a cent and then plummeted to a tenth of a cent, and are no longer tracked by Coinmarketcap.com.

Rohloff left Unvest to spend more time with her daughter and says it’s not her place to talk about the project’s progress, but says it continues to operate.

Rohloff speaks of a “frenzy” that occurred during 2021, when it seemed that every new cryptocurrency released could not lose.

“Unless you’re investing in a scam where someone is just going to pull out the rug and take all your money that you really couldn’t lose on any initial investment you made,” he said.

“Now, obviously, it’s changed a lot, it’s very different.”

Kiwi company NFT VeVe sells collectible 3D sculptures that collectors can display in the real world through augmented reality on their phones, or create virtual showrooms to share with other fans.

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Kiwi company NFT VeVe sells collectible 3D sculptures that collectors can display in the real world through augmented reality on their phones, or create virtual showrooms to share with other fans.

Many Kiwis will be worried about the drop, with a recent survey by the Financial Markets Authority showing that one in 10 owns some kind of crypto asset.

But New Zealand is also home to some big players who trade cryptocurrency’s little brother, non-fungible tokens (NFTs), digital works of art where ownership is verified via a blockchain.

In its most recent report for the first quarter of this year, Nonfungible.com recorded a nearly 50% drop in sales volume and noted a marked slowdown in the volume of buyers and sellers.

Despite this, Rohloff says many of his more crypto-focused friends have switched to NFT investing.

David Yu says that NFT company VeVe is rolling out film partnerships internationally as the platform continues to grow.

RYAN ANDERSON/Things

David Yu says that NFT company VeVe is rolling out film partnerships internationally as the platform continues to grow.

“Even though the early market looks like a bloodbath, I still know people who make around 100x returns on NFT investments in the space of a couple of months,” he says.

One manufacturer of Kiwi NFTs is VeVe, which sells collectible 3D sculptures of superheroes and other pop culture icons.

The company reported $40 million in sales in the first 6 months of the year, and co-founder David Yu said the company had seen a slight market softening, but the platform continued to post multiple dips per week.

“New user downloading and registration continues as we target the mass market.”

Flufs joined the Bored Ape Yacht Club and the Midnight Panthers as popular NFTs featuring versions of animals.

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Flufs joined the Bored Ape Yacht Club and the Midnight Panthers as popular NFTs featuring versions of animals.

Non-Fungible Labs is another big NFT creator from New Zealand, and CEO Alex Smeele still sees a bright future.

The NFL is best known for its Flufs: 3D digital bunnies that bob on the screen and for which buyers pay thousands of dollars.

They are similar to other NFT collections that have grossed thousands of dollars each, including Bored Ape Yacht Club and Midnight Panthers.

Some have hats, some have eye patches, some smoke. They all have their own short backstories, there are 10,000 of them, and in the past they were associated with the American rapper Snoop Dogg.

On Opensea.io, the website where Flufs are most frequently sold, the sale price of a digital bunny is usually between 3 and 4 ethereum, but the value of ethereum has also plummeted.

In November of last year, ethereum was selling for more than $6,700. It is now worth around $1700.

NFL CEO Alex Smeele says that if buyers used ethereum they already had, then the value of a Fluf was tied to the value of the crypto.

“But many people see Ethereum’s price decline as an opportunity to buy at a lower price, as the relative price in US and NZ dollars is lower,” he says.

“We have still had relatively strong volume and pricing despite broader market conditions. This is due in part to the strong support we have from our community.”

Smeele says that a recent announcement of a partnership with Ripple, one of the world’s largest blockchain providers, has also shielded Flufs from the worst of the market downturn.

NF Labs is creating warrens for the Fluf to live in, including Snoop Dogg-themed warrens.

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NF Labs is creating warrens for the Fluf to live in, including Snoop Dogg-themed warrens.

Smeele says that times like these are when “projects that are creating long-term value come to shine.”

“We are a bit isolated as we have focused on building a strong community that is interested in the game and the drive towards long-term utility, rather than the business side of NFTs.”

That long-term utility comes in the form of a metaverse.

It’s unclear exactly what this looks like, but Fluf’s warrens appear to be the start: digital houses to buy, and they’re around $500 each.

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