A cryptocurrency investor has shared his experience of how he became poor again in less than 5 minutes of becoming rich.
Using a popular social media website, the anonymous Reddit user claimed he made $1.3million (N532.97 billion) after investing in SQUID, the digital currency inspired by the Netflix series Squid Game.
But after seeing its value rise to over a 2 million dollars in a flash the coin’s value dropped to $0
Squid coin in November surged to a top price of $2,681 before plummeting to $0.01 – a 99.99% fall in less than a month.
There were several reports that the coin was likely to be a scam, commonly known as “rug pull” that happens when the creators of the new crypto quickly cash out their coins for real money.
The Redditor said that he was “intrigued” and wanted to invest in the Squid Game for “research.”
“I thought, let me put $10(N4000) in this just for funnies. I got around 661 SQUID. As the days went by, I started seeing it climb, 1$, 2$, 5$, 10$, 30$, and I was thinking… Imagine if I can take this money out.
“Of course, I knew that I wouldn’t ever take the money out, I was fully convinced of that, but it was fun to see it happen.”
The investor said that two days later the SQUID’s price had risen to $2,000, which meant he would have made over $1.3million.
However, five minutes later the coin crashed to nothing and he lost everything.
“I’m now able to say I was a crypto millionaire at some point of my life”
The trader concluded that he was was to an extent aware of the scam and advised other investors to never “put money on scam coins, always do your research and be careful on what you invest.”
Not being able to convert a cryptocurrency into a traditional currency is just one of the major risks of investing in crypto. You’ll only be able to get money back out if there’s demand, so you could lose all your money.
If the value drops to zero, either because its a scam or because investors lose confidence, you could be left holding worthless digital coins that you can’t sell on.
Newer coins are even riskier than more established ones like Bitcoin and Ethereum – not least because there’s a higher risk of being scammed.
Last month a trader shared how he lost all his life savings investing in Squid Game cryptocurrency after its value plummeted enabling scammers to plunder $2million.
The investor who had bought 5,000 SQUID at $1 apiece told CoinMarketCap:
“I lost all of what I have in this project. I don’t trust them anymore. Even well-established cryptocurrencies are extremely volatile, which makes them incredibly risky to invest in.
Investors are in tears as over N3trn worth of bitcoin is wiped out
Meanwhile, investors of bitcoin saw over N1 trillion wiped off their investment as the cryptocurrency crashed within the last 24hours.
At its lowest on Saturday, one unit of Bitcoin sank below the $42,000 mark, losing as much as 22 percent, as per a Reuters report.
The fall comes amid Christmas risk-off taking a cue from the global stock markets, which remained volatile for the same reason