What Clark Howard Thinks of ‘Crypto Winter’ After Big Crash

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If you think the S&P 500 decline has been brutal, check out some of the devastating crashes that have taken place in some of the largest cryptocurrencies.

Money expert Clark Howard has long warned people not to view crypto as an investment and to avoid putting any significant portion of their money into what he considers a massively speculative industry.

Never put any money into crypto that would be money you would lose sleep over if you lost it because it is such an unreliable marketplace right now,” Clark says. “Crypto has lost about 70% of its value in just a few months. A number of cryptos have gone to zero. Some were frauds. Some were ones that worked on algorithms that their creators thought would really work and really didn’t.”

So what exactly happened during the recent crypto crash? And what does Clark think about the future of crypto?

Table of Contents

The Crypto Crash of 2022 and Crypto Winter

Headlines across the major financial sites are focused on the trifecta of historical inflation, the Fed aggressively raising interest rates and the stock market reaching bear market territory.

A dramatic crypto crash has served as more of a sideshow in terms of mainstream financial happenings. But it has also wiped out more than $2 trillion in value in a matter of months.

Let’s take a look at how three of the biggest cryptocurrencies — bitcoin, ethereum and cardano — have performed in 2022 versus a few major individual tech stocks and stock indexes.

Entity2022 YTD Performance
S&P 500-22.2%

In general, the more “risk on” an asset is, the worse it has performed in this macroeconomic environment.

Growth stocks have performed worse than defensive stocks. The highest-valued tech stocks (with prices even more heavily influenced by expectations of future earnings) have underperformed growth stocks as a whole. And crypto has mostly underperformed the highest-valued tech stocks.

This latest crash isn’t unique in the relatively short history of crypto. Take bitcoin as an example. If you bought in March 2020 and sold in March 2021, you got a return on investment of nearly 1,100% in one year. If you bought in November 2021 and sold this month, your investment is down more than 70% in little more than half a year.

You can get whiplash checking out some of these recent highs and lows.

$963.72March 24, 2017
$19,650.01Dec. 15, 2017
$3,183.00Dec. 14, 2018
$11,865.20June 28, 2019
$5,165.25March 13, 2020
$61,283.20March 12, 2021
$31,576.20July 16, 2021
$64,400.00Nov. 12, 2021
$18,948.80June 17, 2022

It can be hard for even the most even-keeled, long-term investor, backed with strong conviction, to withstand those sorts of market swings.

“Crypto instead became a mania that had both legitimate players and illegitimate and had wild swings in value that have continued on the downside of late. Most people who have speculated in crypto have gotten burned really badly,” Clark says.

“A small number have done well, but most have been burned. And it is a gamble — but without being able to take in shows, or nice restaurants, or see the glitz and the lights of a casino district somewhere.”

Leverage and the Price Impact

Recently, we wrote about the wild amount of investing on margin taking place by in 2021. People were borrowing money to invest in record numbers.

Because crypto is so speculative, and because of the ability to make life-changing money in a small amount of time, it has attracted leveraged trading to a wreckless extreme.

During the recent downtrend in crypto, price crashes have created some enormous liquidations with big-money buyers being forced to close their positions. As a result of these margin calls, the price has dropped lower, creating even more liquidations in a vicious cycle.

This has threatened major exchanges and crypto lenders who took on too much risk and didn’t anticipate an event quite like this. The entire spectacle has attracted some deep-pocketed individuals and institutions that have been shorting the price of cryptocurrencies.

With inflation yet to be curtailed, the threat of a recession and the continuation of the Russian conflict in Ukraine, the macro environment has served only to reinforce these negative cycles.

The Historic Disaster of Terra and Luna

The idea of a stablecoin that tracks the U.S. dollar has existed for many years. Sometimes these stablecoins are backed by commodities or fiat currency (U.S. dollar, euro, Swiss franc). In other, more risky cases, they’re backed by cryptocurrency — or controlled by an algorithm and not backed at all.

TerraUSD and its corresponding token luna, started in 2018, was one such algorithm-backed “stablecoin.” However, an aggressive and well-capitalized hostile person or entity executed a complex short position in May 2022. This wiped out almost $45 billion of market cap in the course of a single week.


“There were a number of things that seemed to be done in good faith where you were offered an opportunity to earn much more than you could in an FDIC or NCUA-insured savings account or CD. They were offering these very high rates in many cases up into the mid-teens,” Clark says, pointing out that in many cases, those companies have gone under, along with people’s money.

In a slew of negative headlines, this one created some true panic from within the dedicated crypto community.

“Even people who tried to do stable value have generally failed with crypto because they didn’t have sufficient real reserves backing up that stable value,” Clark says. “And that’s why so many of them have failed or frozen.”

Clark’s 3 Biggest Issues With Crypto

As a currency, an investment and a better alternative to a savings account, crypto has so far mostly failed, according to Clark.

Here’s a quick look at his three largest qualms with the current state of crypto.

  • As a currency: Clark says, “Bitcoin has been a failure as money because it doesn’t have a stable value. It moves by huge percentages day by day.”
  • As an investment: Clark says, “If you think about normal things that you might invest in, the value of them would not go up or down by massive amounts in a single day, single week or single month. But that is the history with crypto. Because it is a speculative endeavor at this point. I hate that people even call it ‘investing,’ because it has not been investing. Most people who have speculated in crypto have gotten burned really badly.”
  • As a lucrative alternative to savings accounts (DeFi): “Many of those organizations have now gone either extinct or, at least for now, are insolvent. And so people’s money has vanished.”

Even Clark Sees Future Value With Blockchain Technology, Crypto

Clark’s mission is to help you save more, spend less and achieve financial freedom. It’s through that lens that he gives financial advice.

It can be extremely difficult to give advice to a large audience when it comes to allocating investments. So much of it depends on your goals, assets, risk tolerance, income, timeline, family situation and more. Plus, the reality is that many people aren’t going to spend years of focused time becoming sophisticated investors — nor do you need to do so to do well for yourself.

Often, Clark defaults to giving simple, one-size-fits-all advice. That’s why he loves things like target date funds and Roth 401(k) accounts.

Similarly, his advice on Bitcoin and other cryptocurrencies has been consistent. To paraphrase him: Stay away or at least devote a very small percentage of your net worth to it that you’re 100% willing to lose.

However, after the recent crash, Clark gave perhaps his most nuanced advice yet on crypto.


The underlying blockchain technology is legitimate and probably will have some very positive impacts in the future, Clark says, once it matures over time. “I don’t want that to be discredited by the Wild West kind of atmosphere that crypto has been.”

Clark isn’t a big fan of Robinhood and some of the things that have happened at the fintech broker. But Robinhood ushered in free stock trades for the retail trader.

In the same way, Clark thinks that crypto has introduced the idea that we don’t have to accept the exorbitant fees and selfish, monopolistic abuse of power that some of the biggest banks have deployed.

Is crypto a done thing? No. The underlying concept behind crypto is a sound concept. One of the things that ultimately I hope crypto is able to do is eliminate the massive tax that the big banks impose, essentially, on moving money around,” Clark says. “I mean, it is an absolute abuse of customers the way banks rip you off on moving or converting money.”

Final Thoughts

Clark says that crypto is not an investment because of its instability. However, he’s also on the record saying that a true investment includes a minimum of five years where you don’t need the money — and preferably 10.

For the biggest cryptocurrencies — bitcoin and ethereum — it’s hard (or impossible) to carve out a window of five or more years where it hasn’t been immensely profitable. So, at least in the short history of the two most mainstream cryptocurrencies, treating them more like an investment has been the best possible strategy.

That has meant stomaching the wild swings without selling, dollar-cost averaging (especially after major crashes) and holding for the long term.

If you’re going to get involved in crypto, or if you already are, ironically, it may be best to treat it more like part of your long-term investing strategy rather than a short-term, speculative attempt to gamble and strike it rich.

Clark’s advice is sound because crypto is incredibly risky and could cost you life-changing amounts of money. For most people, staying away completely or risking only the smallest amounts is the absolute right thing to do. But crypto doesn’t have to excel as an actual currency in order to deliver value to its holders.

If you can stay away from the flavor of the day, stick to bitcoin and ethereum and hold for a very long time, there’s at least a case to be made that you could experience a very favorable outcome.


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