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Understanding the Cryptocurrency Crash |  podcasting |  New

When the global financial system collapsed in 2008, banks collapsed and governments around the world were forced to intervene to prevent the collapse of the entire financial system. It cost billions of dollars and, moreover, it proved to be a pivotal moment: it deeply shook the trust that many had in their governments.

As Alex Hern recount Nosheen Iqbal, this period also coincided with the rise of a new technology enabling a new type of currency: a currency that is not guaranteed by governments but rather only exists online: bitcoin was born. At first it was a novelty, useful for buying illicit goods on the dark web and not much more. But bitcoin grew and grew and despite some significant bumps along the way, it peaked at $69,000 per bitcoin. Anyone who had invested in it, or a slew of other competing cryptocurrencies, ended up incredibly rich – in theory at least.

But this year, things took a dramatic turn. As economies were rocked by inflation fears and investors moved towards safer bets, the value of cryptocurrencies began to drop dramatically. Some, like Alex Koh, an investor and YouTube personality, found himself almost wiped out after sitting on small fortunes. For those who have weathered the storm so far, there is hope that this year will be a blow. But can bitcoin rebound?

Photography: Kin Cheung/AP

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