An Abu Dhabi resident is facing the prospect of having to repay more than $160,000 in bank debt after his cryptocurrency investment went awry. The story is another testament to the significant risks involved in virtual currency trading due to the volatile nature of the market.
With the miserable year experienced by many tokens so far in 2018, it is likely that there are others like him who have also been plunged into financial difficulty.
$162,000 in Debt
On Monday, a Redditor with the username “Cryptohomie” submitted a post on the platform describing a brutal three-and-a-half-year repayment plan for a $139,000 loan. According to the details shared by Cryptohomie, the total outstanding amount left to be paid including interest stands at about $162,000.
Based on the breakdown provided by the Redditor, he will effectively be working for nothing for the next three and a half years unless, by some miracle, the prices of cryptocurrencies suddenly reach new all-time highs (ATHs). Understandably, many of the responses from fellow Redditors on the thread were of commiseration with the poster.
2018 Price Crash to Blame
According to the post, the monumental 2018 cryptocurrency price decline is to blame for the Abu Dhabi resident’s predicament. Unfortunately for Cryptohomie, he invested in coins like Ethereum, Stellar, Neo, and Litecoin as well as an assortment of other altcoins that have since crashed spectacularly.
To offer some scale of the magnitude of his losses, consider that the values of these coins have collapsed by more than 60 percent since the start of the year. At its ATH in January, ETH traded at more than $1,000. On Monday, Ethereum fell below $300 for the first time since November. Stellar has lost more than 75 percent while NEO has plunged more than 90 percent since the start of 2018.
Suggested Reading: Learn more about all of the coins mentioned above in our various cryptocurrency beginner’s guides.
Cryptocurrency Investment Risks
In follow up statements by Cryptohomie on the thread, he revealed that he obtained the loan reasonably quickly from the bank. According to him, local banks can offer as much as $100,000 without the need for extensive KYC procedures. The Abu Dhabi resident also revealed that he was a first-time investor.
Stories abound of traders making massive losses in the cryptocurrency market. The largely unregulated nature of the industry means the absence of checks and balances that are ubiquitous in the mainstream investment market. Thus, investors are always urged to be cautious when putting their money into the market knowing that their investments could be gone in an instant.
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