The UAE is home to a number of crypotocurrency “noobs” - an online term for "newbie" investors that bought into the digital currency craze as prices shot up late last year.
Among them is Mohammed, a trader from Pakistan, who dipped his toe in the Bitcoin market in December.
“I invested $10,000, made 30 per cent and sold a week later,” says, Mohammed, 30, who declined to give his full name. “Then I put the whole $13,000 in again a few days later.”
When the Bitcoin price started plummeting in January, he took the money out, a move that wiped out his 30 per cent profit.
The trader says he decided to get involved after Chicago’s CME Group launched its Bitcoin futures contract in December.
“I knew that would give the currency respectability and there would be a flood of people buying for fear of missing out. It was a chance to make some money but what I made, I then lost. It was fun but I will never go near that stuff again.”
Another UAE noob is Fred, a British communications executive, who lives in Dubai and bought into Bitcoin in early November when the price was about $9,000.
Fred, also did not want to reveal his full name; many cryptocurrency investors approached by The National either refused to discuss their portfolios or did not want to share their full details.
“It’s not that I’m ashamed,” says one Abu Dhabi-based Bitcoin investor, “It’s just that I’d rather keep it as my little investment secret.”
Fred says he first considered investing into Bitcoin about six months ago, however, he was wary of the cryptocurrency’s poor reputation.
“I was very sceptical about the links with purchasing on the dark web and the lack of security with a central bank," he says. "But the more I read up on Bitcoin, blockchain and other cryptocurrencies, I realised it was more likely to have an impact in the future of business and offered a genuine and secure opportunity for peer-to-peer lending without the need for expensive fees or currency transfer rates.”
When Fred, 40, finally took the plunge, he invested $900, via the trading house eToro, after he researched online.
He gradually built up his Bitcoin holding to about $4,000, which was worth about a third of a coin at the time.
“When it spiked to $20,000 briefly, I thought about selling. Then it started to crash so I sold some at $15,000, with the profits paying for Christmas," says Fred.
Fred is still invested and admits the January lows were a stressful time.
"It was a bit scary when it went as low as $5,000. There isn’t much history of cryptos to go on, but what there is suggests January usually sees a crash/correction and then a recovery, which is what’s happening now. I bought some more when it rose back to Dh8,000 so I’ve got about a third of a coin."
While Fred says he is "down overall", he still has faith in the currency's future and has also invested into the cryptocurrency Ripple, after a tip off from his brother-in-law.
"Bitcoin is not far off returning to a price that will give me a profit again," adds Fred. "It isn’t for the faint hearted but I’ve got a clear figure in mind for its value when I exit. It’s a fun ride, but I’m aware it could all disappear overnight.”