The world’s richest bitcoin trader has suffered a brutal blow as a result of cryptocurrency plunging in value.
The world’s richest bitcoin trader has lost $ US4 billion ($ A5.8 billion) in just over a month – seeing his fortune plunge by $ US100 million ($ A144 million) a day amid the crypto crash.
The anonymous billionaire had more than 252,000 of the digital coins at the end of march which were valued at $ US12 billion ($ A17 billion), according to BitInfoCharts..
But as the crypto markets wobble and bitcoin plunges in value, the billionaire has seen his fortune mercilessly slashed.
As the currency’s value goes into free fall, they has seen his stash drop $ 4 billion ($ A5.8 billion) in value over last 42 days.
And that is a rate of around $ US100 million ($ A144 million) a day since the end of March.
While they remain exceedingly wealthy – still being technically being richer than Brit billionaire vacuum mogul James Dyson – his fluctuating fortune shows the risks of gambling with crypto.
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The mystery trader’s fortune peaked at more than $ US19 billion ($ A27 billion) with some 288,000 bitcoin back in September 2021.
But they have since sold off around 35,000 of the coin as they navigated the choppy waters of the crypto markets.
And it comes as bitcoin – which is often seen as the gold standard for crypto – has lost around 50 per cent of its value in just six months.
Crypto can be riskier than other investments because they are volatile and speculative – their price often rising and falls very quickly, sometimes seemingly for not reason.
Many cryptocurrencies have a short track record, making them difficult to understand and predict.
This type of investment is also not protected by the regulator which means you have no protection if things go wrong.
Crypto traders can have sudden and unpredictable booms and busts – such as one trader who claimed he lost millions of dollars in just under five minutes.
The price of bitcoin has gone down by about 5 per cent, for example, in just the past 24 hours.
On Friday, May 6, the cryptocurrency was down to just $ 36,141 ($ A51,850), according to Coinmarketcap.
The stock market overall is down as investors sell risky assets, and the values are tightly linked, meaning a dip all round.
In the past day, ethereum is down more than 4 per cent, cardano has fallen almost 5 per cent and Solana has fallen 6.31 per cent to be exact.
XRP and BNB aren’t struggling quite so much, but they are down 0.57 per cent and 2.92 per cent over the past 24 hours respectively.
The latest plunge follows a crypto crash at the start of December, shortly after Bitcoin hit a record value of $ US69,000 ($ A99,000) in November.
One trader lost $ US5 billion ($ A7.2b billion) after the price of bitcoin plummeted in December, highlighting the risks of investing in crypto.
And in another recent blow to the market, Crypto.com users were unable to access funds due to “unauthorized activity” on some accounts.
Twitter’s chief financial officer Ned Segal said at the end of last year that investing in crypto “doesn’t make sense right now”, causing concern among Silicon Valley buyers.
China also announced plans to clean up virtual currency mining, according to CNBC.
Many crypto-mining regions in China are now radically reducing operations.
Previous moves by the country to crackdown on mining and trading of crypto has previously sent markets plunging.
And the unrest in Eastern Europe has contributed to the fall because investors tend to shun risk-sensitive assets during uncertain times.
Investing in cryptocurrency is a very risky business.
You can be left with less money than you put in, and could even lose it all – even if you spend on what appears to be a safe bet.