Most people who bought Bitcoin back in December when it was at its peak of $20,000 are probably kicking themselves right now. However, for one unfortunate Bitcoin owner the price crash has scarred him for life. He took out a $140,000 bank loan in December and invested it into an array on altcoins. So far, he has lost around 85% of his initial investment, and the bank is hounding him every month for repayments. While he had probably hoped the price would keep climbing and he could turn that $140k loan into $140 million, unfortunately the markets had other ideas.
Get Rich Quick – Hopefully
The reddit user known as Cryptohomie had posted his ordeal about how he had planned to invest a large amount in crypto by taking a bank loan, before making enough in three years to pay the loan off and then have a nice chunk still left over. He took the loan over a four-year period, meaning his monthly repayments are at an astounding $3,381. Fortunately for Cryptohomie, the average wage in the UAE is around $5,000, meaning if he has a good job he should be able to cover his loan expenses and still afford to live – albeit on a tight budget for the next three and a half years.
UAE Banks are Letting Crypto Addicts Down
The promise of massive gains has drawn many people into the crypto markets, and many people have taken out excessive loans to be able to make as much money as possible. Unfortunately, the markets don’t always go up, and this is causing a lot of worry at the moment. Therapists are beginning to worry about people committing suicide following massive losses to investment portfolios and savings. Banks are also starting to worry that people borrowed money to buy crypto and will now have no way to pay them back. Australian banks saw this coming and have prohibited their customers from using home loans to buy cryptos. In the UAE, banks freely give out money to Emiratis and they can often have the vast sums in their accounts within three days.
From Home Loans to Crypto Palaces
The UAE is a playground for the rich and famous, with more supercars on the roads per square mile than any other country on the planet. With this life of luxury comes a pressure to keep up appearances, and this causes many Emirati to take out huge loans to buy flashy goods. On the other end of the scale, the potential is almost unlimited. There are entire hotels up for sale with Bitcoin in the UAE, and the uber-rich Bitcoin hodlers are starting to cash in and live the high life.
While it has been a steep learning curve for Cryptohomie, he published his story on Reddit to help raise awareness that the crypto market isn’t all fun and games. For young investors, it appears to be this playground where you can become insanely rich overnight, but the reality can be quite different. If you feel you are becoming addicted to crypto trading and are losing vast amounts of money, try self-excluding yourself from exchanges and seek professional help. Only ever invest what you can afford to lose, don’t ever risk more than that or you will get burnt just like Cryptohomie did.