Bitcoin, 2022, Crash

Abstract

The May/June 2022 collapse of ‘stablecoin’ terraUSD (or UST) and its sister token Luna and the November/December collapse of FTX received lots of media attention and this media attention provided the opportunity to see what ordinary people thought about cryptocurrency. The reader comments posted to the fourteen media stories we reviewed contain tens of thousands of words in which people share their opinions about cryptocurrency and Bitcoin. Those opinions are overwhelmingly negative. One explanation for this negativity is the risk aversion that decision-makers display when they expect the existing order to deliver them gains in the future and don’t want the status quo upset. The few cryptocurrency enthusiasts who braved these forums hold the opposite view and the opposite preference. They perceive the existing order to be deleterious to their wealth and are willing to embrace cryptocurrency, though they know it’s risky, in the hope that it will set them on the pathway out of their domain of losses.