A BITCOIN trader who was a millionaire by age 18 lost millions four years later in a crypto crash after making a huge mistake.
Kiarash Hossainpour, 22, made a fortune investing in cryptocurrencies when he was just a teenager and is one of the most well-known cryptocurrency YouTubers in Germany.
Kiarash said all his money was in crypto, but a recent crash meant his portfolio took a big hit, falling around 60% from its peak.
While investing in a couple of cryptocurrencies, the young millionaire had invested heavily in Terra Luna.
But its finances took a hit after Luna lost more than 99% of its value in May.
Terra Luna, which was among the top 10 most valuable cryptocurrencies in the world, fell below $1 in May, having peaked at close to $120 last month alone.
The dramatic collapse occurred in the space of just 24 hours with its market capitalization spiraling from over $40 billion to just $500 million.
Despite his huge losses, the young investor is still a millionaire who has not stopped investing in bitcoin.
The 18-year-old said he learned a lot from the accident and became much more aware of the risk after Luna’s death in particular.
At the mutual fund he runs with his friends, Kiarash said he’s usually the person with the risk appetite.
“But luckily I have a colleague who analyzes the risk as much as he can and tries to minimize it,” he said.
“That’s what saved us from even bigger losses in the end.”
However, Kiarash still thinks investing heavily in Luna is still a good idea, Insider reports.
And he largely blames the disaster on the “incompetence” of the team that flipped the coin.
He said, “I think the project just collapsed because of the team.”
“But I have to be honest, I was wrong. You can’t always be right, and unfortunately there are some things you can’t predict,” he added.
“Losing such a large amount in the accident doesn’t bother me,” he continued.
Kiarash added that he sees crypto as a long-term investment, adding that he had an investment horizon of at least 10 years for the money he invested in it.
“I just have to get through the current crisis,” he said.
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And the young man believes that investing in bitcoin at just 14 years old has given him valuable experience that has helped him stay calm in the face of the crash.
A couple of months ago he said, “I don’t plan to sell. Even if the price of bitcoin went up to 100,000 euros tomorrow, I wouldn’t sell.”
“I’ve seen coins fall from the top to the bottom and they’re worth nothing. That’s the way it is with cryptocurrency investments.”
Kiarash’s rise and fall story is “part of the game,” according to the crypto enthusiast.
Hossainpour told El País that the collapse of his digital assets worries him only “relatively” because he is not considering selling them.
He considers himself “a strategic investor”, one of those who do not succumb to “sudden panic attacks” because they always have their high beams on.
“I did not sell in moments of uncontrolled boom and I will not sell, of course, in full fall.”
Kiarash largely taught himself about cryptocurrencies and launched his first YouTube channel at the age of 13.
He says his losses would have hit him much harder but luckily he had other income to rely on, like earnings from his YouTube account, where he has more than 100,000 subscribers.
It comes after an investor said he had lost all of his life savings of £400,000 after Luna’s accident.
While another man lost all of his life savings when hackers took control of his phone and banking apps.
The risks of buying with cryptocurrencies
Investing and making a purchase in cryptocurrencies like Bitcoin is risky.
Its value is highly volatile and the city’s watchdog, the Financial Conduct Authority, has warned investors to be prepared to lose all their money.
Investing in cryptocurrencies is not a guaranteed way to earn money.
You should also think carefully about making purchases with a cryptocurrency.
For example, Bitcoin has had wild price fluctuations in recent months and the price can change almost every hour.
The price of one Bitcoin was at $40,258 on January 9, according to Coindesk, but fell to $34,214 just three days later.
That’s a 15% drop.
These price changes are risky for a business as they could sell an item for Bitcoin at one price and the value may drop soon after, leaving them with less money from a sale.
Similarly, the price of Bitcoin has shot up more than 21% since the start of this week, so it can be difficult for a buyer to get an accurate idea of the price of an item if its value changes on a daily basis.