Who loses and earns in Bitcoin
Cryptocurrency - From Mountain Of Debt To Millionaire: The Unbelievable Story Of A Bitcoin Gamer
From mountain of debt to millionaire: the incredible story of a bitcoin gamer
Three sleepless years, debts to his grandmother and an ultimatum from his girlfriend: Yves paid a high price for his addiction. Due to the high-risk game with digital money, he accumulated massive debts. But today he drives the lotus up.
It was finished on June 24, 2016. With tears in his eyes, Yves Welti, bon vivant, insurance employee and Bitcoin gambler, sat on his grandmother's sofa and told her everything. She was the only person he confided in. And maybe the only one who understood him.
Within two and a half years he had lost 180,000 francs, accumulated a mountain of debt of over 90,000 francs and, as a side effect, also ruined his life. Despite ongoing wages, he could not even pay the interest on the loan. The debt trap snapped shut with full force.
Bitcoin & Co .: What are cryptocurrencies?
This is the name given to digital currencies in which all transactions are encrypted using cryptography. The breakthrough in cryptocurrencies came in 2009 with the launch of Bitcoin and the introduction of the blockchain. This technology is comparable to a gigantic Excel table in which all new transactions are entered.
However, this directory is not stored on a single computer, as is usually the case, where it can be easily hacked and manipulated, but decentralized on thousands of computers. This makes it possible, among other things, to send money across national borders without the involvement of a bank or other central organization. The blockchain is therefore the basis of most crypto currencies today.
Grandma decided to bail him out. One last time. She paid off part of the debt and wrested a vow from the grandson: no more Bitcoin gambling with borrowed capital. Yves promised - and shortly afterwards ran with a bulging envelope from the bank branch. “They probably thought I was a grandchildren trick fraud,” he says.
It had all started so harmlessly. For a seminar paper at the university, the then 23-year-old researched cryptocurrencies for the first time. That was in autumn 2013, a Bitcoin cost 120 francs. A few months later he was in the business himself: Using part of his savings, he bought his first bitcoins. Child's play. He quickly discovered a system how he could increase the money invested seemingly effortlessly and without risk.
The magic word was "arbitrage". He bought the bitcoins on a cheap platform and sold them on the more expensive one. That resulted in a yield of around 8 percent - per month. Because it went so well and he wanted to learn, he wrote his bachelor thesis on the subject.
The worst-case scenario occurred a little later. One of the two stock exchanges went bankrupt and a large part of its capital was lost in one fell swoop. Yves was not discouraged and borrowed money from his sisters and grandmother. Lot of money. Because it is well known that lightning does not strike the same place twice, he continued to operate his arbitrage system.
But why win “only” 8 percent when it could be a lot more? “I just became too greedy,” Yves sums up today. With so-called margin and futures trading, the potential profit is x times higher thanks to the leverage effect - but so is the loss.
An example with a factor of 20: If you bet that the price will rise and it does so by 5 percent, you double the stake. If it falls by 5 percent, everything is gone. With the volatile price of cryptocurrencies, such transactions are a high-risk game with fire.
Sometimes it went well, sometimes bad. And if bad, then right. Soon Yves was completely broke. He no longer dared to pump his grandmother and sisters. So off to the credit institute that woos customers on every street corner. They knew nothing about his private debts and granted the loan without a lot of pen reading. It's the summer of 2015, gambling with the fictitious money could go on as if nothing had happened.
As with any addiction, the person concerned always thinks: Just this one more time, then I'll stop. But with every loss, the risk has to be increased in order to be able to possibly make up for it again. That couldn't go well. The borrowed capital was soon used up, and the bank granted another tranche. What he didn't need from his wages for a modest living went on for the interest.
But the digital ruble was still rolling - 24 hours a day, seven days a week. Yves checked the Bitcoin rate every ten minutes, and a tab on the exchange website was always open in the browser. He continued to go to the floorball club, but checked his cell phone during drinking breaks.
He didn't tell anyone anything, and if he did, only fragmentarily. At night he could not fall asleep and if he did, he woke up several times - partly because a specially set up Bitcoin alarm informed him of drastic price increases or losses. For three years he hadn't slept through, says Yves.
For hours he watched in real time how the course was developing and fell asleep several times with the laptop on his knees. “I was a real zombie at that time, you can't call it any other way,” he says. His girlfriend at the time gave him an ultimatum one day - she or the bitcoins. Yves continued to gamble secretly.
He has developed a schizophrenic relationship with money: While shopping, he continued to look at promotions, although he was possibly hundreds or even thousands of francs richer by the time he reached the checkout. "Anyone who trades in crypto currencies should be aware that you can win several annual salaries within a few days, but you can also lose them," says Yves.
So in spring 2016: thanks to the correct rate development, he “turned” 5,000 francs into 40,000 and then 135,000 francs within four weeks. The 270 Bitcoins that he owned at the time would now have an equivalent value of around four million francs. Had, would. The reality was different.
Three days later everything was gone again - and Yves was sobbing on his grandmother's sofa. The game was over. "I thought I would spend the next few years paying off debts," he says.
Money is becoming less important
It turned out differently. If you meet Yves today, he drives up with a Lotus. A boy’s dream bought with bitcoins. And that's just a foretaste. The sudden wealth can be explained by a number: 2017. The Bitcoin price exploded last year to such an extent that with a conservative strategy you could almost only win. Because Yves did not want to break the promise he had made to his grandmother. So he no longer took on outside capital. But he couldn't keep his hands off gambling.
He couldn't have forgiven himself for waiting so long for a price explosion only to miss it when it was there. What he could do without from his own wages, he continued to invest - but now without excessive leverage. He made a longer-term investment plan and no longer chased after every change in course.
Above all, however, he was lucky that 2017 was the year in which the average person started buying bitcoins. That catapulted the course into unimagined heights. Without much effort, Yves Bitcoins suddenly had a value of 400,000 francs and a few months later over a million.
The predefined milestone had long been reached, 250,000 francs had to be paid out. Bingo! The play money became real overnight and was now in his bank account. Untouched and tangible, as if nothing had ever happened. Yves had to look twice when the account balance flashed in e-banking.
At last he was able to pay all his debts to his grandmother. The rest was easily enough for the racing car and a particularly rare combination of cards from his earlier favorite game “Magic the Gathering”. He left 20,000 francs for the playing cards alone, and a further 7,000 were spent on the “ZH 900900” license plate.
Do not such purchases show that he has long since taken off and no longer has any relation to honestly earned money? “It's got something. If you've earned so much at a young age, money loses value, ”he says. But he still lives in a modest flat share and takes over a large part of the rent of his roommate.
He also wants to "give back" something to the general public. He is currently working on the idea of how authors of online contributions - for example in forums or in encyclopedias - could be compensated for their efforts with a micropayment system.
Passers-by pull out the camera
Yves takes a sip of tea. He has never looked at his cell phone in the past two hours, although he still has crypto money worth over a million Swiss francs. The exact amount changes every hour - and Yves doesn't want to read it in the newspaper either. In a stock market crash before Christmas, his Bitcoins suffered a book loss of a sum that most people in the country will never even come close to.
But the exchange rate fluctuations leave him unaffected, he sleeps through the night. Even if the crypto market collapsed completely - which it doesn't believe in - it wouldn't throw it off course. He's already made too much money with it. And he's had too much luck since that fateful afternoon on his grandmother's sofa.
Of cars, Yves frankly admits, he doesn't really have much idea. He just likes the lotus optically. The fact that this attracts glances - half a dozen passers-by pulling out their cell phone cameras at the twenty-minute photo session in Zurich's District 5 alone - is “still awesome”.
In relationship matters, however, it could also be a disadvantage. After all, he doesn't want a partner who is only interested in material things, he says. So he left the sports car in the garage on the first date with his current girlfriend. And drove up on the scooter.
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