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.
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 “idiot.” Mr. Rose concedes that such an assessment may be “kinda true”, recounting that he “ignored 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.” These investments, Mr. Rose states, “paid off until they didn’t,” resulting in the loss of a “small fortune.”
Mr. Rose stated that his “first moves” in the cryptocurrency markets “were smart,” reaping the rewards of “patience and careful research.” Mr. Rose states that “rather than take profits and, say, buy a house, [he]bought more bitcoins.”
Mr. Rose first invested in bitcoin in 2013, “when they were worth less than $100.” He authorized Coinbase to “take $25 out of [his]US bank account each week, buying a quarter of a bitcoin for $25.” Mr. Rose adds that “when 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. D’oh!”
The Allure of the 2017 Bull Market
Mr. Rose stated that “Around 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.“
“Single 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 — $3500 each day to avoid hitting Coinbase’s $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.”
Six Figures Becomes Seven
Mr. Rose stated that he “bought 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.” Again, Mr. Rose purchased more BTC, in addition to “just about every cryptocurrency I could buy on margin on Bitfinex.” These investments saw Mr. Rose turn “around $70,000 into $3 million by placing leveraged bets on two cryptocurrencies called EOS and Iota in a few weeks during November and December.”
Mr. Rose stated that at the peak of the cryptocurrency frenzy during December 2017 his “account was worth over $7 million,” adding that he “had borrowed $14 million to buy more cryptocurrencies.”
Mr. Rose was “paying thousands of dollars a day in interest” on his positions, however, with “each $1000 rise in bitcoin’s value, [he]was making about half a million dollars. “In those heady days, Mr. Rose stated, “bitcoin was making $1000 gains every other day.”
$7 Million Dollar Liquidation
Mr. Rose recounted text messages exchanged between he and his friend before his account was liquidated.
One acquaintance stated “If 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,” to which he responded “I want to own a sports team though […] And have a yacht. These things add up quickly.” Mr. Rose’s acquaintance pleaded “If you are right, then half your bet is enough. If you are wrong, you are broke.”
Despite the dramatic loss, Mr. Rose states “While I have a lot of regrets, cashing out my entire life savings to invest in cryptocurrency isn’t one of them. This was a huge blow, but it didn’t wipe me out.” Mr. Rose adds that “Overall, despite my Bitfinex liquidation, I’m still doing better with my investments than I would have if I had stayed in index funds.”
What is your response to Mr. Rose’s 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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Author: Samuel Haig