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This man lost his savings when the cryptocurrencies collapsed

  Bets on Bitcoin and lost almost everything

It is estimated that $ 400 billion has been wiped out by the value of the major cryptocurrencies since January.

Sean Russell's savings were among these.

Russell rarely played in the stock market and had little investment experience when he put about $ 120,000 in bitcoins in November 2017. He was amazed when he turned into $ 500,000 in just one month.

"I think there was a morning when I woke up, where I made about 12,000 pounds ($ 15,600) in one morning for my investment and continued to work," Russell said. "I was thinking, wow, it's the paid mortgages, it's the holidays I've always dreamed of."

The dream did not last for Russell, who works as a property developer in the UK, buying houses and arranging them. The price of Bitcoin exceeded $ 20,000 in December before collapsing. Now exchange for $ 6,300.

Russell attempted to mitigate his losses by moving money from bitcoin ( XBT ) to a branch called Bitcoin Cash and other cryptocurrencies including Ethereum and Ripple. But that did not work, and Russell says the paper losses on his initial investment reached 96%.

"It was really devastating, quite traumatic," said Russell. "I've seen stories about the millionaires going bankrupt, and you think how it can be, how come you lost that amount of money, and yet, I'm in that position here."

  bitcoin victim 1
Sean Russell lost most of his savings when the price of cryptocurrencies collapsed.

Russell is not alone.

Michel Rauchs, who researches cryptocurrency and blockchain at the Cambridge Center for Alternative Finance, said the explosive rise in prices in 2017 attracted a wave of inexperienced investors.

"Retail investors, students, housewives, even grandmother were driven by the clamor," says Rauchs. "The media said that this was the occasion of a lifetime: they bought at the top and now they are in serious losses".

The accident left professional and passionate investors to discuss where the cryptocurrencies go from here.

"Clearly the frenzy that we have seen and the volatility in the price of bitcoin … resemble many other financial bubbles that are repeated over and over again in our economic history," said Benedetto De Martino, behavioral economist at University College London.

The fever that has gripped the cryptocurrency investors has faded in recent months. JPMorgan ( JPM ) CEO Jamie Dimon and Warren Buffett of Berkshire Hathaway ( BRKA ) warned the investors of you stay away from the bitcoin.

Last week, bitcoin prices plummeted by more than 20% in two days after Business Insider reported that the investment banking giant Goldman Sachs ( GS could abandon the plans for launching an encryption desk.

Goldman Sachs told CNNMoney that he had not made a final decision with bitcoins or other cryptocurrencies.

The Securities and Exchange Commission blocked several proposals for funds exchanged with bitcoins in recent months, including the plans of the giants of the ETF ProShares and Direxion and one supported by the brothers Winklevoss

Despite the warnings, some entrepreneurs of cryptocurrencies see the boom and the collapse as increasing pains

"I markets are cyclical and there are still many opportunities for sophisticated investors, "said Benjamin Dives, CEO of the London Block Exchange cryptocurrency exchange platform.

Pr Imagine investing for the first time, Russell spent years tracing bitcoins and studying blockchain, the technology behind digital currencies. He said that the learning process was how to solve the plot of a murder.

Despite the loss, remains a committed investor.

"I have to be confident about something," he said. "I need to keep my mind busy, because when I focused on the money I lost, it destroyed me mentally and emotionally."

CNNMoney (Leeds, UK) First published on September 11, 2018: 7:59 ET

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