Is Bitcoin the next Digital Gold Rush?
Virtual Currency is currently on the upswing. Bitcoin prices in particular have been skyrocketing, and earlier this month, the digital currency hit a record high of $2967. Virtual currency is gaining in popularity, because first of all, it’s convenient, and secondly, it’s a highly profitable area for investment. For the Bitcoin novice, we might understand that the whole “digital money” thing may seem a little risky, but we recently met a Japanese investor who’s made a pretty penny from dabbling in virtual currency. Read closely to learn the tools of the trade…
Can you introduce yourself briefly?
I’m Dai Okada, 39-yrs-old, and I work primarily in the real estate industry.
When did you start dealing in virtual currencies?
Around January or February. My friend told me about Bitcoin, and I purchased some for 30,000 yen (About $273). Now I have 3 virtual currencies; Bitcoin, Ripple, and Nem. I didn’t buy them for shopping purposes, I saw it more as an investment. I’ve never invested in Forex or stocks, this is my first investment project ever in my life.
How much profit have you made so far?
So I bought Bitcoins when one coin was 80,000 – 90,000 yen ($725 – $816), and now after 4 months, one coin is going for 220,000 yen ($1,995). I bought Ripples a year and a half ago, and the price is now 12x higher. I spent 200,000 yen ($1,815) and now the coins I bought are worth 2,400,000 yen ($21,800.)
“2017 has been widely reported as the dawn for the virtual currency.”
Wow really? Why is the value rising so quickly?
Virtual currencies have been on the market since 2009, but 2017 has been widely reported as being “the dawn for the virtual currency.” This is because many exchange places have been opening up all over the world. In Japan, 18 companies recently filed to set up exchanges for virtual Finance Bureaus, and 12 of them have passed the screening. Some of the biggest stock companies in Japan (SBI and GMO) are also going to be actively dealing with virtual currencies. On a global scale, China and Russia have begun allowing the use of virtual currencies. That’s why so many people are purchasing the coins, and that makes them more expensive. In short, if you start now, you may get the first-mover advantage.
Are a lot of people making money with virtual currency?
I was chatting online about virtual currencies, and I heard about a gentleman who made a profit of 6 million yen ($54,000) within one hour. These stories happen quite often. My friend actually bought virtual currency for 10,000 yen ($90) two years ago, and the price remained the same for a while, so he just left it and did nothing. I recently asked him how much it was worth now, and his answer was unbelievable. His initial investment had ballooned to 8 million yen ($72,500.) He was absolutely astonished. This happened just last week.
On the other hand, are there any people losing huge amounts?
Yes of course. I also know a guy who bought Ripples for 100 million yen ($906,000) when one Ripple was 7 yen ($0.06). The server unfortunately went down and 1 Ripple dropped to 3 yen ($0.03). He got frightened and sold all of them. He lost 6 million yen ($54,000). That was just a month ago, and now 1 Ripple is 40 yen ($0.36). If he’d kept them, he would have made 500 million yen ($4.5 million).
What’s the one trick you’ve learned about making money with Bitcoin?
Even if you see the currency drop temporarily, you should stay the course and not waiver. I’ve learned that it’s best not to constantly monitor the value fluctuations. Once you buy the coins, just let them be. That is the most important thing. If you constantly watch them, you’ll be tempted to sell if the rate drops, or maybe, you’d get greedy and try to buy more. I don’t check the rates during the day, I just check in on them before I go to bed.
“I’ve learned that it’s best not to constantly monitor the value fluctuations. Once you buy the coins, just let them be.”
How do you decide when to buy or sell?
First of all, information is the key. I work closely with a friend, and we take turns attending meetings about virtual currency and monitoring online chats about the exchange company. We can find useful information, for example, when the SBI (Japanese stock company) will start its virtual currency exchange. We also watch the websites of each currency, and even check personal Twitter accounts about virtual currency.
What are the biggest risks with virtual currencies?
There is always a big risk that the server at the exchange company could go down, and the price will drop dramatically. However the price will certainly go back, so you can leverage the risk, and buy some more. And then you can sell them after one or two cycles. Three years ago, the server for one of the major Tokyo Bitcoin exchanges, Mt. Gox got attacked, and it lost 11.5 billion yen ($104 million). That was a huge disaster, but exchange companies learned from that huge calamity, and they’ve reinforced the system. Of course, it’s a digital program, so you can never fully predict.
Do you think virtual currency will be a game changer for your life?
I don’t think that way. It might change my life, but I try not bank all my dreams on it. My goal is just to pay back my car loan. Thanks to Ripple, I am able to do that, but now, my wife wants me to keep the currencies a little longer, so I still have them. Now the bank interest is about 0.01%, but I believe investing in virtual currencies will allow me to double my original capital. I think that’s really good investing. I know my capital can decrease by 20% in one night, but even if that happens, I will grasp my coins tightly until their value rises again [laughs].
Photo by Yosuke Suzuki（Erz）
Text by Akihiro Tajima
If you liked this story, check out more in our Urban Transplants issue.
