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Inexperienced expats warned about borrowing to fund cryptocurrency purchase
| Published: | 3 Sep at 6 PM |
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Expats based in the UAE are warned to beware of borrowing to fund cryptocurrency investments.
One French expatriate based in the UAE and working as a cabin crew member with a major airline has lost almost all of the money he borrowed to invest in cryptocurrencies. Early last autumn, the French cabin crew member made several small investments in cryptocurrencies and came out of it very well due to the boom in the unconventional currency. Three months later, as the boom continued, he decided to get a loan and invest again. Having found a bank willing to lend him Dh367,000, he invested every last dirham in a selection of cryptocurrencies, all of which were alternatives to Bitcoin, without taking any financial advice other than what he’d read on a work WhatsApp group.
As is relatively normal in the world of speculative investments, bust followed boom in a spectacular manner, with the value of his cryptocurrencies soon crashing to around Dh110,000. After coming to terms with the fact that his repayments to the bank would take at least two-thirds of his monthly salary of Dh12,000 for the next three and a half years, he decided to write up his experience on Reddit in order to warn other novice investors not to make the same mistake.
Speaking to a local Abu Dhabi expat-aimed newspaper, he admitted overconfidence due to his initial investment successes. He’d made more than Dh100,000 during the first 10 days of his borrowed investment but, as he told reporters, he didn’t cash in as he’d no experience of how fast the stock market can change and continued to believe his money would simply keep growing. He’s now resigned to paying two-thirds of his salary to the bank every month until he’s cleared the loan, and is still hoping that sometime during the next three years or so his investment will come good.
One French expatriate based in the UAE and working as a cabin crew member with a major airline has lost almost all of the money he borrowed to invest in cryptocurrencies. Early last autumn, the French cabin crew member made several small investments in cryptocurrencies and came out of it very well due to the boom in the unconventional currency. Three months later, as the boom continued, he decided to get a loan and invest again. Having found a bank willing to lend him Dh367,000, he invested every last dirham in a selection of cryptocurrencies, all of which were alternatives to Bitcoin, without taking any financial advice other than what he’d read on a work WhatsApp group.
As is relatively normal in the world of speculative investments, bust followed boom in a spectacular manner, with the value of his cryptocurrencies soon crashing to around Dh110,000. After coming to terms with the fact that his repayments to the bank would take at least two-thirds of his monthly salary of Dh12,000 for the next three and a half years, he decided to write up his experience on Reddit in order to warn other novice investors not to make the same mistake.
Speaking to a local Abu Dhabi expat-aimed newspaper, he admitted overconfidence due to his initial investment successes. He’d made more than Dh100,000 during the first 10 days of his borrowed investment but, as he told reporters, he didn’t cash in as he’d no experience of how fast the stock market can change and continued to believe his money would simply keep growing. He’s now resigned to paying two-thirds of his salary to the bank every month until he’s cleared the loan, and is still hoping that sometime during the next three years or so his investment will come good.
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