San Francisco, Sep 18 (IANS) A 22-year-old Google software engineer, who started investing in the stock market with the help of his parents before he was a teenager, has revealed that he lost about Rs 67 lakh by investing in crypto on margin, meaning that he bought the cryptocurrency using borrowed money.
Ethan Nguonly from California, US, whose investment portfolio currently includes over a crore in retirement (close to $135,000) and brokerage accounts, along with two houses, said that he didn’t get there without making what he now calls his biggest financial mistake, reports CNBC Make It.
Nguonly said that he lost Rs 67 lakh (about $80,000) in crypto between November 2021 and June 2022, including losses of Rs 24 lakh ($30,000) of his original investment and an estimated Rs 41 lakh ($50,000) in unrealised gains.
Explaining how he lost so much money, the techie stated that he had already invested around Rs 33 lakh ($40,000) in Bitcoin and Ethereum, in addition to a few hundred dollars in altcoins such as Shiba Inu and Dogecoin. However, as the price of Bitcoin fell, the techie decided to buy more with Rs 12 lakh ($15,000) borrowed money.
He was up about Rs 42 lakh ($50,000) for a while as the price of Bitcoin reached an all-time high. However, by the end of 2021, the crypto market had plummeted, and by the summer of 2022, Bitcoin's price had dropped by more than 70 per cent, the report mentioned.
"I was investing with some money that I didn’t necessarily have. Once the crypto market kind of reversed, my losses were amplified," Nguonly was quoted as saying.
Although the 22-year-old techie still invests in cryptocurrency, he now sticks to Bitcoin and Ethereum and avoids less trustworthy options, the report said.
The biggest lesson he learned from his mistake is to "only invest money you have and don’t go un-leveraged into very speculative investments".