French Expat Remorseful After Investing $100,000 Loan into Cryptocurrency Coins
After a hugely unsuccessful attempt of investing in the cryptocurrency sector, an airline cabin crew member has been vociferously cautioning individuals from investing the industry. The former investor, whose native country is France, borrowed 367000 dirhams (~ $100,000) during the famous Bitcoin bull market of 2007, only to lose it entirely after the price plummeted in 2018.
Apparently, the Frenchman first heard of and was lured into crypto investing through a WhatsApp group. Initially, the trader invested his own money and the profits were massive, ranging from 300% to 400%. As expected, this success convinced the investor that he is an expert. As a result, he decided to lend additional money from a local bank to make even larger investments. After receiving the loan, the man staked the money into an array of altcoins, including Ethereum, Ripple, Stellar, NEO, and Litecoin.
At first, the investment seemed to be paying off; within ten days he had made $30,000 worth of profit. However, since his primary source of advice was a free WhatsApp group, the guidance was not entirely reliable. Convinced that the upwards trend would persist for a considerable period, the Frenchman did not cash out his profits. This, however, turned out differently, as the markets underwent a drastic nosedive, resulting in the loss of the entire $30,000 profit. Now, the investor has to part ways with 67% off his $3,250 monthly income as loan repayment.
Obviously, if the crypto market had not crashed, the man in question would still have to pay the debt. However, he would have the money to finance the loan, something that he does not have currently. Nevertheless, this incident is an indicator of the inanity of both parties, the bank and the investor. Given that he had limited knowledge of the crypto space, it was stupid and irresponsible of the trader to borrow such a big amount. On the other hand, the bank demonstrated naivety for granting such an enormous amount to fund an investment in a sector as volatile as the crypto industry.
Regardless of the bank’s thinking when awarding the loan, it is evident that the crypto trading sector is extremely unpredictable- prices can shoot up as easily as they plummet. Moreover, the past performance of specific coins is not a reliable parameter of predicting its future market trends. Essentially, due to this inherent nature of the crypto sphere, it is imperative for investors to stake what they can afford to lose.