Asim Ahmad won’t tell you how rich he is — and why should he?
Before the Brit had even reached his 30th birthday, he’d already quit his job at investment giant Blackrock Inc. in London. That was the end of his days in the office, so what’s he been doing since?
He’s now living off earnings made in his spare time with cryptocurrency Ether. Ahmad revealed he invested around $13,000 in Ether when the price was around $10 — more recently it was valued at $470 and at the beginning of the year, it surpassed $1,000.
Ahmad’s isn’t an isolated case; many young starters at major banks and investment funds are doing the same.
“The one-day volatility of my portfolio is higher than my salary, so if I get a few investments right then I’ll have made the same as my yearly wage,” he explained to financial news agency Bloomberg. “Everything else on top is a bonus.”
“Crypto-hype” has starved banks of fresh talent
Deutsche Bank and Goldman Sachs have lost promising young talent to crypto exchanges: rather than continuing to work for institutes, many are starting their own companies with their profits. Ahmad has established a fund, which invests in crypto projects that address social or environmental issues.
29-year-old Adrian Xinli Zhang, who was about to be promoted to Director of Deutsche Bank in New York, is currently building up a trading platform for digital assets, primarily cryptocurrencies, with his Bitcoin profits — and according to inside information, he’s already a millionaire. Working as a risk manager at a major bank is no longer necessary to “make it”.
Banks have a hard time with the volatility of cryptocurrencies
This is a real problem for the big banks, despite the fact that they’ve refused to comment on the subject. Many of them reacted too slowly to the arrival of cryptocurrencies, built their own teams too late and ended up losing a whole new generation, who were already busy using their spare time earning what they weren’t able to in the office.
However, it still remains to be seen whether this was, perhaps, the right decision in the long term: even Ahmad and Zhang are aware of the volatile nature of cryptocurrencies. Ahmad can earn his annual salary in a few days, but can lose it just as quickly when the share price plummets.
“If you start mentally spending this money, it will hurt you when it falls” said Ahmad, “If you enjoyed the volatility on the way up you have to accept it falls as hard if not harder at times.”
Fraudsters use cryptocurrencies
For banks, however, this is a tricky business model: they’re unable to plan properly in such a volatile environment, and cryptocurrencies are still largely unregulated by law. This is particularly problematic in Asia, where many fraudsters have used “crypto-hype” to illegally fill their customers’ pockets. For crypocurrency, there’s no equivalent institution like the stock exchange regulatory authority, so fraudsters in the crypto-world are rarely caught and brought to justice.
This leaves banks divided: even older specialists are enthusiastic about Blockchain technology and many banks already deal with Blockchain or invest in projects based on it. However, many are still sceptical as to whether cryptocurrencies have a future.
While those of the well-established older generations weigh it up, the new-starters are already jumping ship.