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Former journalist, Derek Rose, recently recounted his story of losing over $7 million USD in the cryptocurrency markets. Mr. Rose had invested his life savings into cryptocurrency, using leverage trading to grow his account by 3,500% in a matter of months, before his trading account was liquidated.
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Former Journalist Invested Life Savings Into Crypto
Mr. Rose stated his initial hesitation in telling his story in a public forum, stating his expectation that people may think he is an âidiot.â Mr. Rose concedes that such an assessment may be âkinda trueâ, recounting that he âignored the advice of [his] friends, a financial adviser and random people on the internet in making larger and larger bets on bitcoin and similar instruments.â These investments, Mr. Rose states, âpaid off until they didnât,â resulting in the loss of a âsmall fortune.â
Mr. Rose stated that his âfirst movesâ in the cryptocurrency markets âwere smart,â reaping the rewards of âpatience and careful research.â Mr. Rose states that ârather than take profits and, say, buy a house, [he] bought more bitcoins.â
Mr. Rose first invested in bitcoin in 2013, âwhen they were worth less than $100.â He authorized Coinbase to âtake $25 out of [his] US bank account each week, buying a quarter of a bitcoin for $25.â Mr. Rose adds that âwhen I moved from New York to New Zealand later that year, I needed cash. So I stopped those withdrawals and later sold half of my 10 bitcoins for around $500 to pay off some debts. Dâoh!â
The Allure of the 2017 Bull Market
Mr. Rose stated that âAround May of last year, when bitcoin topped $2000 and another cryptocurrency called Ethereum hit $400, I decided that while I had made a big mistake, there was still time to rectify it. A wild idea hit me: cash out my entire US retirement account and put it into cryptocurrency.â
âSingle and in my mid-forties, I was ready to take a risk and shake things up. It was nerve-wracking withdrawing my entire life savings â $3500 each day to avoid hitting Coinbaseâs $25,000 weekly limit. Of course, the market crashed soon after I started my plan, but I stuck with it and it bounced pretty quickly.â
Six Figures Becomes Seven
Mr. Rose stated that he âbought half a million dollars in Bitcoins when they were less than $8000, only to see their value rise to over $14,000 in a few short days.â Again, Mr. Rose purchased more BTC, in addition to âjust about every cryptocurrency I could buy on margin on Bitfinex.â These investments saw Mr. Rose turn âaround $70,000 into $3 million by placing leveraged bets on two cryptocurrencies called EOS and Iota in a few weeks during November and December.â
Mr. Rose stated that at the peak of the cryptocurrency frenzy during December 2017 his âaccount was worth over $7 million,â adding that he âhad borrowed $14 million to buy more cryptocurrencies.â
Mr. Rose was âpaying thousands of dollars a day in interestâ on his positions, however, with âeach $1000 rise in bitcoinâs value, [he] was making about half a million dollars. âIn those heady days, Mr. Rose stated, âbitcoin was making $1000 gains every other day.â
$7 Million Dollar Liquidation
Mr. Rose recounted text messages exchanged between he and his friend before his account was liquidated.
One acquaintance stated âIf you are right that having 1 BTC [one Bitcoin] is impressive in the future then what you have now is more than enough. So you can sell a bit and hold some cash,â to which he responded âI want to own a sports team though [âŠ] And have a yacht. These things add up quickly.â Mr. Roseâs acquaintance pleaded âIf you are right, then half your bet is enough. If you are wrong, you are broke.â
Despite the dramatic loss, Mr. Rose states âWhile I have a lot of regrets, cashing out my entire life savings to invest in cryptocurrency isnât one of them. This was a huge blow, but it didnât wipe me out.â Mr. Rose adds that âOverall, despite my Bitfinex liquidation, Iâm still doing better with my investments than I would have if I had stayed in index funds.â
What is your response to Mr. Roseâs story? Share your thoughts in the comments section below!
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The post Former Journalist Recounts Losing $7 Million Trading Crypto appeared first on Bitcoin News.
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