German teenager Erik Finman has an unusual success story.
When was 12 years old, he realized school wasn’t his future. Most of his classmates felt the same, of course, but Finman took action: He made a bet with his parents.
His parents promised that if he became a millionaire before his 18th birthday, he wouldn’t have to go to college.
So Finman took the 1,000 euros from his grandmother meant for his studies and bought bitcoins at a rate of about 10 euros each. He won that bet with his parents by becoming a bitcoin millionaire before he turned 18.
Finman, now 19, has been trading in bitcoin and other cryptocurrencies for seven years.
Our colleagues from Business Insider Germany spoke exclusively with Finman, who explained why you can still become a millionaire with cryptocurrencies over the next 10 years and discussed the crash earlier this month.
Business Insider: Erik, we speak to each other at a time when the prices of cryptocurrencies have plummeted across the board. Was this the start of a crash and perhaps the bursting of a bubble, or just a late correction after the quick gain of recent months?
Erik Finman: I still believe in cryptocurrencies. There are always ups and downs on the way up. Many people have anticipated this decline. It was almost a self-fulfilling prophecy after many experts spoke of a bubble.
For me, the decline is due to a decrease in momentum — after the development of the last few months, it had to happen at some point. It was foreseeable because value continued to rise steadily while many people were not convinced of the rise in prices.
Of course, I didn’t know exactly on which day that setback would come. However, the advance of cryptocurrencies is unstoppable. A single crash does not change that. People will continue to invest in it and become increasingly emotionally connected with digital currencies.
Business Insider: That means that you keep your bitcoins?
Finman: That is true. I remain stuck with my bitcoins — and there are a lot of them.
Business Insider: These are the words of someone who has been investing in cryptocurrencies for seven years and has a lot of relevant experience. But somebody who has only recently entered the currency is likely to become nervous after the recent losses …
Finman: I have met many such people. As interest increased and the price rose, they were attracted and invested their money in it. But the biggest mistake they can make is to get out of the market now and sell their bitcoins just because of a setback.
It is important to know — and especially when you invest a lot of money — that the prices fluctuate greatly. In the past, bitcoin has had these setbacks time and time again, and this is unlikely to change in the future. But bitcoin will probably continue to rise. Maybe it only takes a few weeks; maybe years. Of course, no one knows.
For me, however, it would be the wrong strategy to sell after such a fall in prices, because I believe that there is a real chance that value will rise again to the levels we last saw.
Business Insider: If you are so convinced, does this mean that you see a good chance to buy bitcoins when the price is so low?
Finman: Yes, exactly. But not only me. I have many friends and fans who almost begged for a crash. They asked for a correction and a crash because they wanted to buy but thought the price was too high.
This drop in the price of bitcoin gives them a chance. And now you must have the courage to really get involved. Otherwise, at some point, you look back and think, “If only I had bought after the reset.” So I really guess people are now using the reset to buy.
Business Insider: Not only has bitcoin collapsed, but most other cryptocurrencies have also fallen. Are you still convinced that bitcoin is the best digital currency, or do you also have other favorites?
Finman: Today, bitcoin is the best cryptocurrency for me.
But bitcoin is like Netscape or Myspace. Bitcoin is sort of a pioneer of a new technology, so it’s important that it continues to exist. But the technology is already beginning to be obsolete — to buy a coffee for $2, you have to pay a transaction fee of $30.
These issues need to be addressed at the technology level, by giving a new coin or updating a coin. Add to that the electricity costs for the mining — to mine a bitcoin, you need so much energy, with which you could cover the needs of a house over a whole year.
In addition, most of the miners are located in China, and thus the energy comes from Chinese coal-fired power plants, so bitcoin, meanwhile, contributes to massive environmental pollution. Also this problem can be solved by a new technology or an update of an existing technology.
Bitcoin has been around for a long time, and Myspace or Netscape have been successful for a while. But at some point, better products came on the market — Facebook or Google Chrome, as an example.
Fact is, bitcoin as we know it today will not last forever. The only question is what comes next — either an update that solves the problem, or another coin will prevail.
Business Insider: Technology also has its limits, and cryptocurrency today has a completely different status than a few years ago. Do you think you would be just as easy to win that bet today with your parents?
Finman: If you are smart about cryptocurrency over the next 10 years, many people can build their fortunes even better than before.
The area is still relatively small; the market capitalization is just over half a trillion dollars. I do not want to be misunderstood: This is, of course, a very high amount, but in comparison to other asset classes, it’s small. Therefore, I say if you do not become a millionaire in the next 10 years, then it’s your own fault.
New business models and innovations are still emerging in this area, and therefore, there are many investment opportunities. It’s a new kind of gold fever, or a new kind of Silicon Valley — there are really plenty of opportunities.
Business Insider: That sounds very easy. After all, more and more initial coin offerings are springing up — and there is always the risk of a total loss.
Finman: That is true, and it takes a certain amount of effort to analyze. But this situation will also improve with time — there will be better and more credible ICOs.
But it’s not just about investing in existing things. Everyone is free to start their own business in the field with an idea and earn a lot of money. That’s risky, too, but a bit less risky for me than the pure investment.
But there are already two different ways to get rich in this area: You can start a new business, or invest in existing coins or ideas. You can also count on those who have proven for a while that they can be successful, like Monero. I like this cryptocurrency because it also has a good field of application.
The bottom line is that you should be careful and deal well with the currencies you want to invest in.
This article originally appeared on BusinessInsider.com.