THE WORLD'S richest Bitcoin trader has lost $4billion in just over a month – seeing his fortune plunge by $100million 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 $12billion, 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 freefall, they has seen his stash drop $4billion in value over last 42 days.
And that is a rate of around $100million 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 $19billion with some 288,000 BTC 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.
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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%, for example, in just the past 24 hours.
On Friday, May 6, the cryptocurrency was down to just $36,141.33, 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%, Cardano has fallen almost 5% and Solana has fallen 6.31% to be exact.
XRP and BNB aren't struggling quite so much, but they are down 0.57% and 2.92% 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 $69,000 in November.
One trader lost $5billion 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 "unauthorised activity" on some accounts.
Five risks of crypto investments
THE Sun’s consumer team round up the five major risks of investing in cryptocurrencies:
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
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.
You might not be able to access your investment if platforms go down and you could be left unable to convert crypto back into cash.
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There have also been warnings around scams related to cryptocurrencies, with people losing vast sums of money.
You should never invest in something you don’t understand and you should never put in money that you can't afford to lose entirely.
What is cryptocurrency and how does it work?
CRYPTOCURRENCY is online money that can be used to purchase certain items or services without the need to use real names or to go through a bank.
How much coin a person holds, the deals that are made and the fluctuation of a currency’s worth are all recorded on the ‘blockchain’, which serves as a ledger.
The value of a cryptocurrency typically goes up and down based upon supply and demand, dependent on how many transactions are made using the coin and how many coins are made, referred to as mining.
The more useful the coin is seen to be the more it is worth, which is decided based on the number of people who invest in it and the number of transactions that are made using it.
However, the value of a cryptocurrency can also increase if tech figures, such as Elon Musk, talk about a specific coin as they are seen as experts of the online world.
The big players include Bitcoin, Ethereum, Binance Coin and Dodgecoin – but even their currencies' values have fluctuated over time.
When Koda was launched in May last year the currency was worth $0.0000730 and last week, it was worth $0.00068110, according to CoinGecko.
Like all cryptocurrencies, the value fluctuates by the day but at its peak, it was worth $0.00223939, which was a 2,967 per cent increase from its original value.
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