One man's aspirational cryptocurrency investment has turned into a disastrous financial lesson for others considering doing the same.
Reddit user Cryptohomie, who identified himself as a 32-year-old living in Abu Dhabi, says he's still suffering the consequences of taking out a six-figure loan from Emirates Islamic Bank in the UAE to purchase a range of cryptocurrenices.
The Reddit user posted an image to the CryptoCurrency Reddit page on Monday, showing monthly repayments of 8194 dirham (NZ$3381) until December 2021. The original loan taken from the bank was 338,000 (NZ$139,000), according to the document, with added interest making it 393,296.80 ($NZ$162,333).
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"Here is my bank instalment related to the loan I took to invest in crypto," the Reddit user said, adding, "I'm working for nothing and I'm at 85 percent loss. I hope it gives you a lesson."
Having bought into Neo, Stellar, Litecoin, Ethereum "and some s**tcoins that lost 95 percent of the value already", the Reddit user is now feeling the brunt of those cryptocurrencies losing their value. Neo, for example, has lost around 90 percent of its value since peaking in January.
Nevertheless, Neo is one of the cryptocurrencies the Reddit user is "now mostly into", along with Ontology, Elastos, Stellar and HPB. The other currencies the user bought into, such as Ethereum, is down 80 percent, while Litecoin is down about 85 percent.
The world's largest digital currency Bitcoin has plunged in value this year, falling to a new four-month low of US$6,370 (NZ$9066) in June. Bitcoin has been caught in a slump recently, wiping billions of dollars away, after peaking at the end of last year.
"I'm 32 and it was my first speculative investment. I think it's an age where we're still unconscious and take lot of risk if we don't have big responsibilities like a kid or bills to pay," the Reddit user told followers.
UAE banks give large loans quite easily, the user explained: "You can get $100,000 within a few days on your account without much verification."
Reddit users were part amused and part sympathetic towards the situation. One user said: "I don't think there's anything we can say that you don't go to sleep thinking about already."
Another wrote: "Since this last run I've wondered how many people did this sort of thing and how much banks have loaned out for crypto. I imagine there have and will be quite a bit of credit/loan defaulting."
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