Crypto-assets had elicited much excitement way before they became mainstream. Among investors who were brave enough to take the plunge rather early, some fared well over time, others not so much.
We bring you some of their stories, in the hope that you will take inspiration as well as lessons from them and invest now, but wisely nonetheless!
The Ones Who Went from Rags to Riches
The vast majority of people involved in the cryptocurrency market aspire to generate wealth through this new asset class. But not everyone makes it to the top. Here are the stories of some who did.
(Psst! Reading about these stories might induce major FOMO in you.)
A Dutch family came to be popularly known as the Bitcoin family after they sold everything they had and bought into the crypto. Didi Haitutu with his wife and three children are now living a high life, having profited handsomely from a highly risky investment.
It all began when he liquidated the family’s assets to make the investment in 2017, while Bitcoin was trading at $900, in the hope that it would take off. And Bitcoin did not disappoint, because, despite fluctuations in its valuation, it is now trading at over $39,211.
Now the Bitcoin family travels the world and has lived in over 40 countries. They don’t own a house, or have bank accounts, and say they are leading the lifestyle of “decentralized nomads”.
While the Bitcoin family’s story is a classic example of high risk, risk-reward, it is important to acknowledge that Didi Taihuttu was familiar with Bitcoin volatility, and 2017 was not the first time investing in crypto for him. In fact, he started his journey in 2013, so Do Your Own Research (DYOR) and test the water.
At age 12, who would have thought of investing in Bitcoin? Well, not a lot of people, but Erik Finman is an exception. In May 2011, Finman made a deal with his parents when he was just a pre-teen; he offered to skip college and pursue an unconventional education if he could invest successfully.
He needed to turn the $1,000 cash he got from his grandmother into a tidy $1 million before he could convince his parents. Setting a bar too high for all 12 years across the world, he achieved his goal after purchasing about $1,000 worth of Bitcoin when it was only $12 per coin. Of course Finman achieved his objectives and became a self-made millionaire at the age of 18.
Erik has now grown his Bitcoin holdings to 431 bitcoins, worth over $4.8 million.
When Coinbase was first launched in 2012, its first employee was none other than Olaf Carlson-Wee. One of Coinbase’s earliest users, Carlson-Wee sent a very long email that year to the founders, asking for a job—basically, any role would do. While most graduates after college just want to catch a break post-graduation, he was on a mission to make money and he knew just how.
He became employee No. 1 with a job in customer support at the then-fledgling company. And the company paid him in Bitcoin for his three years there.
Carlson-Wee finally left the exchange platform in 2016 to launch one of the first-ever crypto hedge funds called Polychain Capital.
Today, he is a notable figure in the crypto industry. Carlson-Wee is the founder, CEO, and managing member of Polychain Capital, which manages $200 million funds that invests exclusively in blockchain assets.
The Ones Who Became Cautionary Tales
While the stories so far might have stirred up some FOMO in you and you may want to set out on your next big investment voyage, the following ones will inspire you to tread the crypto waters safely.
James Howells would have been as wealthy as the Queen of England if he hadn’t thrown away his computer hard drive eight years ago. There are numerous tragic stories about people losing laptops or forgetting passwords. But this one never fails to top the list.
Howells is an IT engineer who accidentally threw away hard drives that contained a “private key”. This would be his ruination for that key was just what he needed to access his bitcoins, of which he claims there were 7,500. Today, one bitcoin costs $39,211, so you do the math and see why he is desperate to retrieve that drive.
In the hope of finding it, he wants to excavate an entire landfill in his hometown! He suspects that the hard drive was dumped there. The landfill is not open to the public, so he needs permission from his local council to implement his plan.
However, the permission has been denied for now.
So somewhere in the UK, there is a pot of digital money buried in a dump. Perhaps this will turn out to be the modern version of El Dorado?
After investing his life savings in cryptocurrency, a former journalist lost nearly $9 million! Derek Rose claims he lost “more money in Bitcoin than most people will earn in a lifetime”.
Rose’s investment in Bitcoin started in 2013 when he purchased ten bitcoins but sold them for around $500 to pay off some debts. He then cashed out all of his US retirement funds and invested them in cryptocurrency. The funds came from his hard-won savings while working as a journalist.
Things were going smoothly at first. Cryptocurrencies were surging in value, and Rose took out a loan to boost his holdings. He was paying $1,000 in interest per day, but he was making a daily profit of half a million.
At one point, Rose’s assets had grown to $7 million, but he wanted to own a sports team and a yacht. He kept using leverage and ended up losing everything.
Derek Rose’s loss is everyone else’s lesson. Or it should be.
This story is proof that everyone is equally vulnerable to a crypto market crash, no matter their expertise in the field. Chris Larsen is the co-founder of Ripple, a coin created to manage bank transactions better.
Larsen’s personal holdings were worth $60 billion when Ripple hit an all-time high of $3.84 in 2018. On paper, that was enough to put him in the top seven wealthiest people on the planet. Even richer than Larry Page, Carlos Slim, Larry Ellison, and Michael Bloomberg combined.
In what might be the most painful example of “what goes up quickly must eventually come down hard”, Ripple lost 74% of its value during the 2018 crypto crash also known as the Bitcoin Crash and the Great Crypto Crash.
Chris Larsen’s net worth got slashed by around $44 billion due to the fall.
Investing in cryptocurrency assets is so dynamic that pretty much anyone can become the next Olaf Carlson-Wee or James Howells (nobody would want to be the latter, though).
The volatile crypto market combined with healthy investment choices will determine who will go from rags to riches, or riches to rags. All we can say is that the present is your time machine for the future, so make sure you invest in the right things.
And don’t just jump in head first; test the tumultuous waters before.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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