Now cryptocurrencies like bitcoin are in 'panic mode', we might finally see the end of the bullish crypto bro

Towards the end of last year, when bitcoin was surging close to $20,000 (£16,000), the buzz around the cryptocurrency became deafening.

Crypto bros were trumpeting their good fortune all over the internet, to the point that the term “crypto bros” was coined. The hype was ramped up even further by tales of bitcoin millionaires, propelled to a life of luxury with a few well-timed trades, and reached fever pitch when the Winklevoss twins, of Facebook fallout fame, became the world’s first bitcoin billionaires in December 2017.

A few months later, the twins blasted older finance bosses for “failure of the imagination” when it came to cryptocurrencies. These literal crypto bros took aim at CEOs such as Warren Buffett, one of the world’s most successful investors, who warned that bitcoin “definitely will come to a bad ending”.

“As you get older your brain loses its plasticity at some point and you get wedded to the frameworks that you have,” said Tyler Winklevoss. Notably, he also accused crypto critics of being part of a “privileged minority”. Pot, kettle, meet Winklevoss.

Experts are warning that cryptocurrencies have entered “panic mode”, which seems fitting given what’s been going on in the world’s major markets in recent days.

A crisis in the Turkish economy has sent a number of emerging market currencies spiralling downwards; the lira itself plummeted against the dollar, the Indian rupee plunged to a record low against the greenback.

Meanwhile, bitcoin dropped close to 2018 lows earlier this week, while ethereum fell by almost 20 per cent on Tuesday. No wonder the phrase “panic mode” is being bandied about.

This isn’t linked to the Turkish crisis that’s rocked global markets, although the assets have shown similar, mainly negative, volatility recently. Cryptocurrencies have declined mainly because investors are liquidating crypto holdings gained through initial coin offerings, a popular but controversial form of fundraising.

But the timing of both “panics” serves to highlight the different experiences investors will have in either market.

Central banks can step in to deal with domestic currency moves. For cryptocurrencies, largely unregulated, there is no similar option.

The lack of regulation has allowed crypto scams to proliferate – it’s not unusual to hear about investors losing millions to fraudsters.

But after all the hyping of bitcoin, ethereum and the rest, there are now a lot of investors left in a very different position to the likes of the Winklevoss twins, who can afford to take the hit and get out of the crypto game at a loss.

That’s why chatting up of cryptos at the top of the market by people who could afford to withstand huge losses was completely irresponsible.

I know two people who dove into the market when it was more buoyant, confident that they would see their investment go up. These are not people who had previous experience of investing in equities, funds or other, more traditional assets, and they can’t afford to lose a lot.

People must take responsibility for their own decisions, of course. Was it stupid to put their money into something they didn’t really understand, without making sure to cover their backs? Yes. It really was.

But the people who shouted about cryptos as a moneymaking asset that The Man just didn’t understand also need to take responsibility. They played a part in bringing lots of small fish into the crypto pond, and now they’ve jumped out as the funds are being drained.

The tide has turned in the online forums where cryptocurrencies are discussed 24/7. Where once investors were bullish, in more than one sense of the word, and scathing of any detractors, now there is a lot more tempering of strident, pro-crypto chatter.

When bitcoin was booming, so were the crypto bros. Now it’s not going so well, they’ve gone quiet. More regulation might encourage a bit of restraint next time the market picks up – if it does. If cryptocurrency really is going to be the way of the future, it can’t be a market that only the privileged few can survive.