Hindsight is 20/20.

Margin Call

It's been just over a year since last summer's crypto crashes, and investors who lost out are still licking their wounds.

One young crypto enthusiast, 22-year-old software engineer Ethan Nguonly, reflected on his crypto losses to CNBC this week, explaining to the broadcaster that back in 2021, he invested — on margin — a sizeable $40,000 into Bitcoin and Ethereum, while picking up some dogecoin on the side. At the time, the market was soaring, and Nguonly was soon emboldened to pour another $15,000 into Bitcoin.

When the industry was at its peak, the amateur investor told CNBC, he was up an impressive $50,000 from his initial investments. But when the market crashed in 2022, it crashed hard, vaporizing trillions of dollars in the process. Nguonly, for his part, tallied a staggering $80,000 in losses, a figure made worse by the young engineer's risky decision to borrow in order to invest.

"I was investing with some money that I didn't necessarily have," Nguonly told CNBC. "Once the crypto market kind of reversed, my losses were amplified."

Maybe Next Time

Though $80k is a lot of cash to watch go down the drain, it's worth noting that Nguonly, though he's quite young, seems financially resilient. The engineer told CNBC that he's been investing with the help of his parents since he was a teen, and at 22, his portfolio includes two houses and $135,000 in retirement and brokerage funds. (Other former crypto investors, on the other hand, have been less than lucky in their post-crash outcomes.)

Amazingly, Nguonly told CNBC that he still "[believes] in cryptocurrencies as a whole," though he noted that he does "think that a lot of these altcoins can be very risky and I avoid putting any money towards them." A curious take, given that the vast majority of the money he put into the market seems to have been invested into Bitcoin and Ethereum rather than altcoins, and Nguonly still lost out in a major way. But, hey, live your truth.

The lesson Nguonly says he did learn? That you should "only invest money you have," the engineer told CNBC, "and don't go un-leveraged into very speculative investments." So, in other words, don't borrow money from a broker to pour money into digital currency that may or may not qualify as an unregistered security, is sometimes named after sex acts, and also has close ties to expensive JPEGs of digital monkeys. Hindsight's 20/20.

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