[Parker] Interview with crypto “whales”
The financial market has been in chaos. But during this time of confusion, there are people that have managed to gain from investing in crypto currency. So-called whales, they are firmly standing in their current positions sailing through an investment environment where uncertainties are multiple times higher than traditional finance. After years of snooping in crypto communities, this reporter was able to meet a few of them. #Lessons learnt from failure Interviews were arranged with eight “whale” investors that maintained high profitability since before 2018. On average, they held around 100 bitcoins per person, which is the equivalent to about 1.1 billion won. A one-time success can be passed as luck. But generating profits for more than three years is a different story. One technique commonly shared by all of them was sticking to their own principles. By experience, all eight of them had invested in the stock market before jumping into cryptocurrency. One investor who entered the crypto market in 2015, is said to have lost approximately 50 million won in the stock market once. Another investor agreed that failure in stock trading had helped him gain in crypto currency. Such experience made them prioritize diversified investment and risk management as their utmost principles. “To be honest, there were times when I was frustrated as the price uplift trend was much stronger than my expectations. I think refraining from rushing to buy in when prices were going up and keeping my pace gave good results,” said one interviewee which started trading crypto currency in 2017. #Reading the market trend It’s reasonable to guess that at least one of this group had participated in collective action to intentionally hike prices and bail out at the right moment. On the contrary, interviewees said they avoided taking part in such activities, as minor coins that can be controlled by a small group of people entail high risks in the first place. Their technique for high profitability was simple: they constantly rode on top of the market trend. One investor that first traded cryptocurrency in early 2017 said the crypto market’s vulnerability was what offered a lot of opportunities: Anyone who sees the right timing can gain. In 2017, there were large opportunities in initial coin offerings and arbitrage. It was later that year that word spread that local authorities were eyeing to regulate those practices. After that, they generated profits by investing in initial exchange offerings, exchange events and peer-to-peer lending services. One investor said 20 percent of assets came from ICO or using the services of foreign projects. #View on crypto fraud victims Then what is their view on victims of crypto currency-related fraud? Their common response was that they had pursued profit without an understanding of investment or the coin market. Until recent, the market was not under regulatory control so it spurred many drastic cases of failure. One interviewee who also runs a crypto community himself pointed out some investors started investing with a fantasy based on success stories, which numbed them to realize the actual situation. Investors all called for strong regulation to prevent excessive ICO or public listings on crypto exchanges. In particular, those sitting at the head of suspicious, “good haul” projects should be strictly penalized. At the same time, there should be preparation for regulations to recognize crypto currency as a legitimate asset as company shares, they added.