Famed Chinese OTC bitcoin trader, Zhao Dong, recently shared the story of how he first entered the bitcoin markets, the losses he incurred, and his views on speculation in the cryptocurrency markets.
Zhao Dong’s Rocky Start in the Cryptocurrency MarketsZhao Dong, the founder of DFUND, has, in recent years, risen to prominence as one of China’s largest OTC traders. However, early in his trading career, Mr. Dong would incur losses that drove him to contemplate suicide.
An interview published by Weixin states that Zhao Dong first entered the cryptocurrency markets with approximately 10 million yuan (roughly $1.58 million USD). He “followed the bull market quickly,” shortly leading Zhao Dong to open heavily leveraged positions. As a consequence, Zhao Dong found himself 60 million yuan (nearly $9.5 million USD) in debt to friends for whom he was informally managing the money of – after losing 9,000 bitcoin in a single day during February 2014. Despite questioning his will to live, Zhao Dong decided to persevere.
Zhao Dong Loses Over $23.5 Million in 2014During 2014, Zhao Dong states that he lost “nearly 150 million yuan” (almost $23.7 million USD) due to his decision to open “one of the largest [bitcoin] mines in [China]” immediately preceding the onset of 2014’s cryptocurrency bear season.
Zhao Dong states that his mining operations were based in Shanxi, Inner Mongolia, Sichuan, and Shenzen. As consequence of tumbling BTC prices, significant establishment costs, and mounting repayments to creditors, Zhao Dong states that the “bitcoins dug in every day [could]n’t afford even the electricity bills.”
In 2015, Zhao Dong states that he was forced to liquidate his mining operations – which saw him receive only 3 million yuan (474,000 USD) for hardware that initially cost him 50 million yuan ($8 million USD)
Zhao Dong Discourages Retail Bitcoin SpeculationDespite his reputation as an OTC trader, Zhao Dong rejects the notion that he is a professional speculator. Zhao Dong states that he “doesn’t do technical analysis. I’m not a speculator. In fact, I’ve always been a small profit maker and I’m not a speculator.” Looking back on his experiences, Mr. Dong emphasizes risk management as the most important thing for traders to observe, before citing attributing a quote to Mark Zuckerberg – “not risking is the biggest risk. But adventure plus risk control is perfect.”
Zhao Dong seeks to discourage retail traders from entering the cryptocurrency markets, stating “Honestly, if you are not a professional speculator, then I suggest that you do not want to invest in speculation. For most of the speculation, losing money is almost inevitable. It’s like going to a casino.”
In spite of up-and-down experiences with bitcoin, Zhao Dong describes BTC as comprising “far more than just a technology,” adding that bitcoin “will have a profound impact on human history […] Bitcoin is the first time in human history to use technical means to ensure that private property is sacred and inviolable.”
Source: https://news.bitcoin.com/zhao-dong-recounts-how-he-lost-9000-btc/
