Steven knew he was taking a risk when he first started investing in crypto. It was 2020, and he was 21 years old, living on a fixed income from an engineering internship. But he went ahead with it anyway — finding a way to invest in Ethereum every month despite his limited salary. “I was very happy to see my initial input triple in value between December 2020 and May 2021,” he says.
But on May 12, 2021, everything changed. Ethereum “dropped to approximately half its value in a couple of hours, while I was watching in disbelief behind my laptop. I lost 60 percent of my assets in a day,” he says. He coped by getting drunk with his buddies, many of whom were in the same boat. Over drinks, they lamented about Elon Musk’s announcement that Tesla would no longer be accepting Bitcoin. Worse yet, like them, other terrified investors pulled out in a panic, “which only made it spiral down harder,” Stevens recalls.
Steven and his friends chalked it up to an expensive life lesson, a sentiment echoed at the time in a post in the r/AskMenOver30 subreddit, which asked, “How do you get over your financial losses?” In the thread, others recounted their major financial losses, which were certainly not limited to the crypto crash. Rather, redditors shared stories of losing money buying condos in 2007, or blowing their savings relocating to a new country. But what they had in common was a similar coping mechanism: reminding each other that the experience was an education, albeit a very expensive one.
“Look at it in post-mortem. In hindsight, you can probably see what went wrong and where,” wrote LazyRefenestrator, a business owner who reported a mix of losses and gains over a nearly 20-year career. “Perhaps some things were in your control, others weren’t. Were red flags ignored, or were you led astray in your assessment of the opportunity by others?”
With every loss, “you get a little better,” they added. “If you don’t, you need to really examine the past more closely, and be extremely honest with yourself.”
For her part, behavioral economist and author Keisha Blair prefers to think of financial losses not as lessons, but as “financial trauma.” When left unaddressed, some of the consequences can be “hypervigilance around money, avoidance of financial tasks, an ignoring of financial obligations, emotional blunting and a lack of communication about one’s finances,” she explains. Along those lines, a large body of research suggests that significant financial losses and prolonged financial stress can take a significant toll on a someone’s psyche and increase their risk of committing suicide.
The psychological fallout of a financial nosedive certainly surprised Michael Taylor, who left his telecommunications career after some success trading in the U.K. market in 2016, only to lose 100 grand within a year. “For a time, I really struggled with my mental health,” he recalls. At his lowest low, Taylor took it as a “wakeup call” and got serious about being a full-time trader, instead of a guy who bought some stock as a side hustle.
Taylor believes monetary losses are like any other large loss. Whenever a person gets fired from a job, goes through a bad breakup or loses a lot of money on a bad investment, there’s a pressure to recover right away in one move, but “the market doesn’t work like that” — and neither, of course, does life.
Since his big loss, Steven has pulled most of his remaining funds out of crypto and is working to rebuild his savings at a new full-time job. But he doesn’t see himself as traumatized by the experience. Instead, he’s learned his lesson, and is now wary of big financial risks and only takes financial advice from trusted friends, as opposed to strangers online.
“On the internet, you’ll find a lot of people who ignore the real consequences of major financial losses, and it’s easy to lose sight of your own situation because of that,” he says. “But you don’t need to make risky investments to have a slightly better life.”
Lauren Vinopal
Lauren Vinopal is a writer and stand-up comedian based out of New York City, who writes mostly about health, science and men. She is the host of the Mid Riff Comedy Show in Brooklyn, a frequent podcast guest all over, and lives the life of a teen who looks like they haven’t slept in years.
