Reddit User Gets $147,000 Loan and Loses 85% on Cryptocurrency Investments
Reddit User Crypthomie Loses 85% Of His Investments In Altcoins
A virtual asset fanatic who borrowed a loan to buy virtual assets has realized losses after the cryptos lost much of their value.
Investment With NEO, Litecoin, Ethereum, And Stellar Ends Up In Losses
A 32 year of Reddit user named Crypothomie, who resides in Abu Dhabi, posted a picture of his repayment schedule from his bank to the virtual asset subreddit. The picture he posted indicates a document from Emirates Islamic Bank which shows monthly repayments of local currency equivalent to $3,067 until mid-December, 2021.
The loan he borrowed is indicated as $126,500 with an unpaid balance of approximately $147,200, inclusive of interests. According to the crypto investor, he still has over three years to go before he repays the entire amount. This means that until then, he has to work for nothing, yet he is presently at a loss of about 85%. He hopes that this will be a lesson to other crypto fanatics.
It is worth noting that he did not spend the borrowed funds to buy Bitcoin. Instead, he bought Stellar, Ethereum, NEO and Litecoin, in addition to some ‘shitcoins’ which apparently lost close to 95% of their values.
Looking back, some of the crypto like NEO lost approximately 90% of its value at the beginning of the year. Stellar also lost 75%, with Litecoin shedding off approximately 85%. In the recent past, Ethereum has also realized a decline in its price by about 80%, with Bitcoin also losing about 70% of its value after having hit a high of $20,000 towards the end of last year.
The situation seems to have affected many cryptos since even the market capitalization of the approximately two thousand virtual assets listed at the CoinMarketCap have seen a drop from $800 billion to less than $200 billion in the recent past.
Moving forward, in spite of the losses, Cryptohomie has not given up, asserting that he is currently investing in Ontology, Elastos, HPB, and NEO, declaring that the small money he borrowed was just seed capital and many banks in the UAE easily grants such loans.
Responses For Reddit On The Investor’s Losses
There were mixed responses from the Reddit community, with some being sympathetic. Those who sympathized with him did not want to worsen Cryptohomie’s dire situation. On the other hand, some members of the community were critical of his situation, claiming that his risky purchases was one of the reasons why the market reached the highs of last year.
One user claimed that it was the actions of people like Crypothomie that banks had to stop permitting the use of their cards to buy virtual assets, which left many crypto fans complaining of the move.
Towards the end of last year, at a time when the value of several cryptos saw a rise in pricing, the US securities regulator warned individuals not to borrow loans to purchase the virtual assets. According to Joseph Borg, an official from the Alabama Securities Commission, people went as far as taking out mortgages to purchase Bitcoin. Borg asserts that the biggest challenge with innovation and technology is that in most cases, they are known to outrun regulations.