A bitcoin trader allegedly lost nearly 200 bitcoins during the recent cryptocurrency market correction, which forced the bitcoin price as low as $9,231 after peaking at $19,891 last month.
The tragic story, which was posted on the Bitcoin Markets subreddit, is a stark reminder of how fleeting crypto wealth can be — and how bitcoin traders and investors can often mistake luck for supernatural skill.
The trader, whose account has now been deleted, said that he or she took $3,000 in poker winnings and turned it into nearly 200 BTC by betting successfully on last year’s bull market.
By trading on margin and correctly predicting that the bitcoin price would increase, the user was able to multiply the value of his or her position. Had the trader closed out the position at its most profitable, he or she would have walked away with 300 bitcoins, worth nearly $5 million at the time.
“I thought I was a trading genius, a god, whatever,” the author said, at which time the story takes a tragic turn.
The trader increased his or her position size and leverage in mid-December, as the bitcoin price hit $16,000 following its first dip to $11,000.
This proved to be the first of several critical mistakes, as the trader’s entire 50 BTC position was liquidated when the market dropped down to $12,000. He or she was still holding 150 BTC, which would have been a significant — potentially life-altering — profit reaped from an initial investment of just $3,000
A few bad trades later, however, and those holdings evaporated as well, leaving him or her with nothing to show for a years’ worth of trading.
“At this time I am still in shock,” the trader wrote,” the last few months I’ve neglected relationships and school, and I’ve been daydreaming about living the high life rich as f–k with my millions.”
Many investors were captivated by the market’s outsized gains in 2017, leading them to make similarly-unfortunate decisions. A recent survey, for instance, found that approximately 20 percent of investors who bought bitcoin using a credit card had not paid off the balance.
Having weathered a myriad of bitcoin price swings, long-time industry observers like ShapeShift CEO Erik Voorhees and Union Square Ventures co-founder Fred Wilson have said that it is wise to take profits when a position becomes extremely profitable and use those funds to pay off consumer debt or perhaps diversify into other assets.
Unfortunately, this trader did not heed that advice.
“I never want to hear the word BTC again because I want to forget,” the post concluded.
Featured image from Shutterstock.
Last modified: May 20, 2020 9:09 PM UTC