On Thursday 5 December 2024, for the first time ever, the price of Bitcoin broke past the $100k mark, peaking at $103,242.70. This recent price surge is one of many, going back to the summer of 2024 when Bitcoin’s value broke past its previous 2021 peak. Now it’s worth $40,000 more than that.
For many people, the crypto hype had long passed. Those who made millions had grabbed the opportunity at the right time. But this resurgence has generated new interest. During the crypto frenzy of 2020/2021, people ploughed money into crypto investments, some of whom lost everything. In the summer of 2022 we spoke to Arjun, someone who’d lost his life savings of $10,000 trading cryptocurrencies. At the time, he hadn’t spoken to anyone about it, not even his parents or close friends. It was having a huge impact on his mental health but he felt opening up about it would help him get things off his chest and move on.
Hi Arjun. When did you first hear about crypto and what got you interested in it?
Arjun: I first heard about crypto when I was a kid at school but I really started investing in it around 2020 when everyone was getting in on it. For me, it wasn’t about getting rich quickly. I just wanted a bit of a side income, trying day trading and getting that extra $100 and $150 per day. It was quite useful. So that was my goal. I’d heard about people getting rich. I knew it was achievable. It’s cryptocurrency. Anything can happen. But my goal was to just try to be realistic and create a steady income. That’s it.
Before you started investing, did you speak to any friends or family about it?
Arjun: Yeah, friends and family knew I was investing in crypto but they had the impression I was playing around with $1,000 or $2,000. They didn’t know I’d invested all of my savings.
Right. So which platforms did you use and which coins did you invest in?
Arjun: The platform I used in the beginning was Binance. Later when I got into day trading a bit more, I used Bittrex and Bybit because of the fee structure. It was more viable for day trading. When I was getting started, BNB was something that actually made quite a bit of money. Later on, however, when I knew more about the crypto space I realised that you can make money in almost every coin if you just do the analysis properly. So when I got into day trading, it wasn’t a single coin. I had a TradingView account and there were 10 to 20 cryptocurrencies that I would examine daily and try to find the perfect opportunity.
From the sounds of it, it appears you were doing things quite intelligently.
Arjun: I would say I was above the level of the average wannabe trader. I had done my research and I was quite disciplined.
So what took you from doing your research and being disciplined to deciding to risk your entire savings?
Arjun: It wasn’t like I was putting $10,000 on a single trade. I was actually doing it quite calculated. I used to risk 2% per trade and that’s when I did really well. Initially I grew my $10,000 account to about $13,000. But after a few losses I got greedy and all my discipline went down the drain. I started risking 5%, 7%, 10% to try to make back the previous losses. From there I just kept on losing and losing.
For some coins, people invest because of a charismatic leader or founder. Did something like that influence what coins you invested in?
Arjun: No, not really. I wasn’t the type of guy to marry a single coin. I did my research and went with what I thought was a good opportunity at the time.
You come across as someone who wouldn’t fall into the trap of losing everything.
Arjun: Had I remained disciplined and stuck with risking 2% per trade, I don’t think I would be in the situation I’m in now.
What was going through your head when you first started making losses?
Arjun: The first big loss I took was $800. In an hour, it was all gone. I decided to stop trading for 2 or 3 days. And during that time, all I could think of was, “Wow, I’ve just lost $800. Imagine what I could have done with it.” After those 3 days, things felt a bit clearer and I started to trade again. But when I was trading, I kept thinking of the $800 and trying to make it back. That caused me to take more risk and lose more, basically repeating what I’d done previously.
Do you think there was an element of addiction there?
Arjun: Oh, definitely. I was aware that I was falling down this rabbit hole but I couldn’t stop.
And it continued until you lost it all?
Arjun: Yes. And when I lost it all, that final $2,500 left in my account, my heart just sank. I can’t really put it into proper words. I had this disgusting feeling in my stomach. What was I going to do now? It was all hard earned money gone. All I could feel was regret and I wished I could go back in time and stick with my discipline.
How has it impacted your life since it happened?
Arjun: I would say that actually it has changed for the better. I took it as a hard lesson that taught me a lot. It’s allowed me to become a better version of myself and start looking for more opportunities. I started reading multiple self-development books too.
Do you think you’ll ever go back to trading crypto?
Arjun: Since I lost everything, I’ve been practising paper trading . I’m trying to become more disciplined and I plan on taking a funded forex account test to get back into trading. It’s not exactly cryptocurrency but it’s basically the same principle. I no longer have the funds to trade by myself so I’d need to pass a test. There are several prop firms like FTMO and the The5%ers. So if you pass a test, they give you access to a funded account.
Given your history and personal experience, do you think it’s wise to get back into trading? Isn’t there a risk that you’d fall into the rabbit hole again?
Arjun: The biggest mistake I made when I was starting was thinking that something like $1,000 isn’t a lot and that I need more capital in order to make money. And that eventually led to me putting in my whole life savings. I understand how wrong I was.
Ok, right. Do you think some of these coin founders need to shoulder some responsibility for losses? They pump up a coin, get a lot of investment, and then the value plummets.
Arjun: I don’t think so. Everyone invests at their own risk. They should have done their due diligence. With Luna, for example, if people had done their research, they probably wouldn’t have invested in it. A lot of YouTubers and researchers had been pointing out serious problems with Luna, which eventually led to its collapse. I would say that 80%-90% of the average retail investor don’t do their due diligence. They end up losing all their money and then they complain it’s a trap, a scam and all that.
How about your personal relationships? Do you still plan on keeping your losses a secret?
Arjun: I don’t plan on keeping it a secret but I feel like I’m moving on from my loss. I’ve started a new business and I might tell my parents when I’m a bit more financially stable. Right now, I feel like if I tell my parents about it, I will be letting them down. $10,000 is a lot of money. I could have done a lot with it.
What would you say to someone who’s looking to invest in crypto and might have the same attitude you had, in that they feel like they’re capable of controlling themselves and won’t fall into a trap.
Arjun: Crypto brings a lot of opportunity. But if you think you’re disciplined, like I thought I was, I would say re-evaluate yourself first. Start with paper trading. Don’t trade with actual money. Or if you do, keep it small. And then see how things go from there. Try it out for 3 months at least and see if you can be consistently profitable or not. Because it’s actually very difficult to make 10%-15% profit a month. Incredibly difficult. It’s definitely not a gold mine. Getting some profits early on can affect your psychology. I remember that happened with me when I invested $400 in BNB. Within a few hours it was worth $700. I was shocked. It made me greedy. I started reading online success stories, for example, some guy who turned $100 into a million, stuff like that. But the reality is that’s very rare.