+ 0.40
+ 0.12%
+ 1.41
+ 0.41%
+ 1.40
+ 0.34%
+ 1.00
+ 0.6%

Easy Come, Easy Go: How One Trader Made And Lost A Bitcoin Fortune

January 26, 2018 2:54 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

A popular Reddit post this week tells a cautionary tale for any cryptocurrency traders sitting on huge gains. The anonymous poster tells the story of how he traded his way from $3,000 worth of bitcoin to nearly $4 million in gains before losing every last cent.

According to the poster’s story, his venture into the bitcoin trading world began when he won 3 bitcoin in a poker game. When he started trading bitcoin, those three bitcoins were worth about $3,000. Over time, he slowly traded his way up to 200 bitcoins, worth nearly $4 million at the peak of the bitcoin market.

“I thought I was a trading genius, a god, whatever,” the poster wrote. As they often do in day trading, things quickly went south.

What Goes Up…

The poster says he made a series of ill-timed trades during the recent period of volatility following the peak in bitcoin price at around $19,000 that cost him 50 bitcoin overall. He began shorting bitcoin at $12,000 and added to his short position at $13,000, $14,000 and $15,000 before liquidating at $17,000, a series of trades that cost him another 50 bitcoin.

He then transitioned to a long position at $17,000 only to ride the price back down to $13,000 and lose another 50 bitcoin.

At this point, the poster described himself as “devastated, unsure, no clue what’s going on.”

Yet remarkably, he made the decision to leap back into the market by taking a long position at $11,500 only to liquidate at $10,500. After the price again climbed to $13,000, the trader went long one final time. He liquidated his bitcoin position earlier this week for another loss that would cost him his last bitcoin.

Cautionary Tale

“At this time I am still in shock,” the poster said, adding that “the last few months I’ve neglected relationships and school, and I’ve been daydreaming about living the high life rich as fuck with my millions.”

Unfortunately, these types of stories are all-too-common when it comes to traders attempting to jump into day trading with relatively little experience and nearly no risk management skills.

The cryptocurrency market is one of the most volatile and unpredictable financial markets in history, and even extremely experienced traders are struggling to predict its movements or even begin to potentially value cryptocurrencies like bitcoin.

Buying and holding bitcoin is enough of a gamble, considering how deeply divided regulators, hedge fund managers, traders, economists and financial experts are on the future of the currency. Attempting to day trade bitcoin on gut feel alone is one of the most dangerous moves a trader can make at this point in time.

Related Links:

12 Cryptocurrencies To Watch In 2018 (Besides Bitcoin)

Does Bitcoin Actually Hold Any Value At All?

Related Articles

BitTorrent Cryptocurrency Surges 197% As It Becomes Next Pump Target After Dogecoin: What You Need To Know

BitTorrent (BTT) cryptocurrency has skyrocketed 197% over 24 hours and 295% over a seven day period leading to press time at $0.0015 on Tuesday. read more

This Week In Cryptocurrency: Yale Invests In Crypto, Coinbase's $8B Valuation

The cryptocurrency market finished a difficult week on a low note on Friday, with most major currencies trading down on the day. Here’s a look at some of the headlines that were moving the cryptocurrency market this week and which currencies were on the move. read more

XRP Plummets Another 19% As Coinbase Delivers Latest Jolt

XRP (XRP) traded 19.14% lower over a 24-hour trailing period at $0.227 at press time, as per CoinMarketCap data. What Happened: Coinbase, a major cryptocurrency exchange desk based in Silicon Valley, delivered another jolt to Ripple on Monday, saying it had decided to suspend the XRP trading pairs on its platform in light of the SEC lawsuit, starting Jan. 19. read more

Three Unique Ways To Invest In The Burgeoning Crypto Space

Many investors over the past six to nine months have watched in awe as Bitcoin, Ethereum, and crypto related stocks have skyrocketed in value. Bitcoin, the largest crypto asset by a large margin, is up just under 100% year to date through 3/29/2020 and is currently trading around $58,500 per coin. At this price the market cap of Bitcoin is just above $1T USD. read more