I was a cryptocurrency millionaire for about 5 minutes with $1.3million – then I lost everything as the coin crashed

I was a cryptocurrency millionaire for about 5 minutes with $1.3million – then I lost everything as the coin crashed

A TRADER has shared how he became a millionaire after investing in cryptocurrency- but only for five minutes as he lost everything when the coin crashed.

The anonymous Reddit user claimed he made $1.3million after investing in SQUID,the digital currency inspired by the Netflix series Squid Game.

The cryptocurrency surged as high as $2,681 before plummeting to $0, down by 99.99% last month.

Tech website Gizmodo had previously warned 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."

He said: "I thought, let me put 10$ 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 continues by saying that two days later the SQUID's price had risen to 2000$, which meant he would have made $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," he said.

The trader concluded that he was "fully 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 crypto.

Cryptocurrencies are extremely volatile and can be incredibly risky to invest in.

Investors risk losing all of their cash investing in crypto and newer coins are even riskier than more established ones like bitcoin and ethereum.

The value can go down as well as up in the blink of an eye and you can lose all your cash.

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."

How to spot crypto scams

CRYPTO scams are popping up all over the internet. We explain how to spot them.

  • Promises of a high or guaranteed return – Does the offer look realistic? Scammers often attract money by making fake promises.
  • Heavy marketing and promotional offers – If they are using marketing tricks to con customers you should beware.
  • Unamed or non-existent team members – Just like any business you should be easily able to find out who is running it.
  • Check the whitepaper – Every crypto firm should have a white paper. This should explain how it plans to grow and make money. If this doesn't make sense, then it could be because the founders are trying to confuse you.
  • Do your research – Check reviews online and Reddit threads to see what other people think.

5 risks of crypto investments

THE Financial Conduct Authority (FCA) has warned people about the 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.

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