An expat who had invested in cryptocurrency using a bank loan warns others of the risks involved in investing in cryptocurrency.
The French man started investing in cryptocurrency in September 2017 after hearing about it on work’s whats app group. This went very well as he made three or four times his investment. Filled with over confidence, the man who lived in Abu Dhabi decided to up his game. So he visited a bank to request for a loan.
The bank agreed to give the airline cabin crew a loan of Dh367,000 , which he invested in different cryptocurrency that included Lumen (XLM), Neo, Ripple (XRP), Ethereum (ETH) and Litecoin (LTC), all this are alternatives to Bitcoin
The first ten days were wonderful, and the French man made over Dh 100,000. Having no knowledge or experience in the stock market, the young man thought the trend is always shooting up, so he did not cash them out. This has been a bad year for cryptocurrency market that has let it to suffer huge losses, wiping millions of dollars off the value of investment. The value dropped to just Dh 110,000 leaving the investor in debts.
Talking to The Nation, he admits to not seeking financial advice before running to invest on cryptocurrency. Posting his crippling bank loan repayments statement on Reddit, which accounts for two thirds of his Dh 12,000 monthly salary, he hopes his experience will be a lesson to others. Though he has sworn not to invest anymore, he still clinks to the hope that the investment value will rise again. As he still has three and a half years to go before he is freed from the loan.
Though many have made large sum of money quickly through cryptocurrency investment, financial experts urge the public to be careful when it comes to cryptocurrency investment. Keren Bobker, a financial advisor tells the public to only invest an amount of money they are willing to lose.
He added saying that though most people do not have the financial knowledge in cryptocurrency; they opt to move away from the stock market. The founder of Dubai-based Block Gemini,Christopher Fernandes says that getting rich fast is the mentality everyone have when it comes to investing in new technology. This mentality is what causes losses especially when you don’t understand what you are doing, he added. He urges other people thinking of investing in cryptocurrency not to invest more than five per cent of their portpolio.