A 22-year-old software engineer with Google, whose investment portfolio currently includes more than Rs 1 crore in retirement and brokerage accounts, plus two houses, revealed that he lost about Rs 67 lakh by investing in crypto on margin. It means that he bought the cryptocurrency using borrowed money.
Ethan Nguonly from Orange County, California, started investing in the stock market with the help of his parents before he was a teenager, CNBC Make It reported. But that journey included what he now calls his biggest financial mistake.
The techie said that he lost Rs 67 lakh in crypto between November 2021 and June 2022. His losses include Rs 24 lakh of his original investment and an estimated Rs 41 lakh in unrealised gains.
Nguonly told the publication that he had already invested around Rs 33 lakh in Bitcoin and Ethereum, apart from a few hundred dollars that he used in altcoins like Shiba Inu and Dogecoin. But as Bitcoin’s price fell, the techie decided to buy more with about Rs 12 lakh of borrowed money.
For a while, the 22-year-old told CNBC Make It that he was up about Rs 42 lakh as the price of Bitcoin reached its all-time high. At the end of 2021, however, the crypto market nosedived and by the summer of 2022, Bitcoin’s price crashed over 70 percent.
“I was investing with some money that I didn’t necessarily have,” Nguonly told the publication. “Once the crypto market kind of reversed, my losses were amplified.”
Looking back, however, it wasn’t necessarily the decision to invest in crypto that Nguonly regrets, it was using borrowed money into the investments. "That’s why my losses were significantly amplified,” he said.
Now, although Nguonly continues to invest in cryptocurrency, he sticks to Bitcoin and Ethereum and steers clear of less reliable options.
“I still believe in cryptocurrencies as a whole,” he told CNBC Make It. “However, I do think that a lot of these altcoins can be very risky and I avoid putting any money towards them.”
Speaking to the publication about the biggest lesson he learned from his mistake is to “only invest money you have and don’t go un-leveraged into very speculative investments,” he said.
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