Sinking chips

Devastating losses and broken how digital currencies such as bitcoin and 'stablecoins' went from boom to collapse

- Alex Hern and Dan Milmo

Yuri Popovich had watched his neighbours' houses burn down to the ground in Kyiv and he needed a safe place to put his money. So he did what millions of amateur investors have done in recent years: he turned to cryptocurrency.

"It was impossible and unsafe to store funds in the form of banknotes. There was a big risk of theft, we also had cases of looting. Therefore, I trusted a 'stable and reliable' cryptocurrency. Not for the purpose of speculating, but simply to save," he said.

The digital asset that Popovich chose in April was Terra, a "stablecoin" whose value was supposed to be pegged to the dollar. It collapsed in May, sparking a rout in the cryptocurrency market whose victims include Popovich. He lost $10,000.

Popovich said his losses were "devastating", although donations from sympathetic onlookers on social media have helped make up some of the shortfalls. He said: "I stopped sleeping normally, lost 4kg, I often have headaches and anxiety."

Popovich is one of many experiencing the deep chill of the current crypto winter, more than four years after the market's cornerstone, bitcoin, marked the first digital freeze by tumbling from its then peak. It went on a long tear after that but has come to a juddering halt, falling below the $20,000 mark at one point this month far below the peak of nearly $69,000 it hit last November.

The fall has been sharp and spectacular: a market estimated to be worth more than $3tn barely six months ago is now worth less than $1tn.