September 6, 2019

MARKETS ARE A FUNCTION OF THE STATE (profanity alert):

WHAT HAPPENED TO THE GUYS WHO INVESTED THEIR LIFE SAVINGS IN CRYPTOCURRENCY?: The short answer is, they became a valuable lesson for the rest of us to never, ever do this (Andrew Fiouzi, MEL)

It was the "summer of crypto love" -- private Telegram groups were ablaze with altcoin (every cryptocurrency alternative to Bitcoin) chatter, Bitcoin whales were breaching the digital horizon and the crypto-community writ large was wondering when they were going interstellar. "At the time, we all thought we were going to the moon and there would be Lambos lined up on the other side," says Kyle, a crypto community moderator. "But turns out most of us ended up with Camrys." 

Kyle is referring to the second half of 2017, when the price of Bitcoin -- a decentralized digital currency commonly referred to as cryptocurrency -- went from being worth $3,000 a coin in May of that year to its peak of $20,000 per Bitcoin just seven months later. "FOMO was a major talking point inside these crypto communities," explains Kyle. "Everyone was investing on the basis of FOMO, but very few actually knew or cared about what the companies were building. It was all hearsay and hope."

But hearsay and hope is often enough to convince someone to gamble their life on fairy dust. "I was working for a bank in Europe when a colleague told me about Ethereum [another cryptocurrency] end of 2016," writes soundsoviel, a self proclaimed "crypto millionaire." "That's when I invested blindly what I had left from my savings. Boy I had no idea. It went well as you might know. I also had the right timing when I switched from Ethereum to eos [yet another cryptocurrency] one year later. My initial investment was suddenly worth about almost 100x in a liquid market. Worth about a million [dollars]. I didn't tell anyone about that apart from my parents, my best friend and the colleague who told me about crypto." [sic throughout]

Although he would go on to lose everything once the crypto market began to hemorrhage -- he notes in the same reddit post that he's sitting in a bar in the slums of East Africa, enjoying his "$0.60 beer in the shadow" -- his story is still among the luckier ones with regard to people who attempted to ride the crypto wave only to find themselves washed up on the shore without a penny in their pocket. That's because soundsoviel, at least, was playing with house money -- others went deep into the red in the hope of striking gold and found themselves reeling in nothing but a nightmare of debt. 

Case in point: redditor Crypthomie, who identifies himself as a 32-year-old living in Abu Dhabi, and who just last year posted an image of his repayment schedule for the nearly $400,000 loan he took out to invest in crypto. His schedule, which began in January 2018, will see him pay a little over $8,000 a month toward his loan until the end of 2021. "Still 3 and half years to go until I'm freed," he wrote in 2018. "Until then, I'm working for nothing and I'm at 85 percent loss. I hope it gives you a lesson." 

Last year, he told News.com.au exactly how his investment in the crypto bubble backfired. Per the report, he bought several altcoins like Neo, Stellar, Litecoin, Ethereum and "some other shit coins," in hopes that one of them would be the next Bitcoin, "most of which, lost 95 percent of their value." "I'm 32, and it was my first speculative investment," he told News.com.au. "I think it's an age where we're still unconscious and take lot of risk if we don't have big responsibilities like a kid or bills to pay." 

While he's one of the lucky few who could even afford to pay a bill that big that fast, he's not alone in his recklessness.

Posted by at September 6, 2019 1:55 PM

  

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