This man lost his savings when crypto-currencies plunged

About $ 400 billion has been cleared since January.

Sean Russell's economies were among them.

Russell rarely played on the stock market and had little experience investing about $ 120,000 in Bitcoin in November 2017. He was stunned when it reached $ 500,000 in just one month.

"I think there was one morning when I woke up, where I earned about £ 12,000 ($ 15,600) in one morning thanks to my investment, and it continued," he said. said Russell. "I thought, wow, it's paid mortgages, it's a vacation I've always dreamed about."

The dream did not last for Russell, who works as a real estate developer in the UK, buying houses and repairing them. The price of Bitcoin exceeded $ 20,000 in December before collapsing. It is now trading at $ 6,300.

Russell tried to mitigate his losses by transferring money from Bitcoin (XBT) to an offshoot called Bitcoin Cash and other cryptocurrency, including Ethereum and Ripple. But that did not work and Russell says that the paper losses on his initial investment have reached 96%.

"It was really devastating, really traumatic," Russell said. "I've seen articles about bankruptcy of billionaires, and you think how can that be? How on earth have you lost that money? And yet, I'm in that position."

Russell is not alone.

Michel Rauchs, who studies cryptocurrency and blockchain at the Cambridge Center for Alternative Finance, said the price explosion in 2017 has drawn a wave of inexperienced investors.

"Retail investors, students, homemakers, even grandmothers have been pushed by the hype," says Rauchs. "The media told them that it was a unique opportunity, they bought at the top and are now grappling with heavy losses."

The crash left the professional investors and enthusiasts debating the destination of cryptocurrencies.

"Clearly, the frenzy we have seen and the volatility of the price of bitcoin … look like many other financial bubbles that are constantly recurring in our economic history," said Benedetto De Martino, behavioral economist at University College London. .

The fever that has taken hold of investors in cryptocurrency has faded in recent months. JP Morgan (JPM) CEO Jamie Dimon and Warren Buffett of Berkshire Hathaway (BRKA) have warned investors to stay away from bitcoin.

Last week, bitcoin prices fell more than 20% in two days after Business Insider announced that the investment bank giant Goldman Sachs (GS) may be abandoning his plans to launch an encryption desk.

Goldman Sachs told CNNMoney that he had not made a firm decision on Bitcoin or other cryptocurrencies.

The Securities and Exchange Commission has blocked several proposals for exchange-traded bitcoin funds in recent months, including the plans of the ETF giants ProShares and Direxion and those of the Winklevoss brothers.

Despite the warnings, some cryptocurrency entrepreneurs view the boom and the crisis as growing pains.

"The markets are cyclical and there are still plenty of opportunities for savvy investors," said Benjamin Dives, CEO of the London Block Exchange cryptocurrency trading platform.

Before investing for the first time, Russell spent years following bitcoin and studying blockchain, the technology behind digital currencies. He said that the learning process was like solving the plot of a mystery murder.

Despite the loss, he remains a committed investor.

"I must have hope about something," he said. "I have to keep my mind busy because when I focused on the money I lost, it mentally and emotionally destroyed me."

CNNMoney (Leeds, United Kingdom) First published on September 11, 2018: 7:59 AM ET