In the podcast Edeltalk by Twitch streamer Kevin “Papaplatte” Teller (27) and Dominik “Reeze” (28) Reezmann, the two often tell stories from their lives. The current episode was particularly interesting for Papaplatte’s viewers: He confessed how he lost €50,000 in one night.
Update: We published the article on March 7th. updated at 4:45 p.m. and adjusted the headline.
How did the loss come about? The streamer said in his podcast that he has been investing in cryptocurrencies for quite some time. Over several months he managed to earn profits of €1,000-2,000 a day through so-called leverage products.
He admitted that he didn’t understand much about what he was really doing and was driven by his winnings. In retrospect, he realizes that it was just gambling, even though he didn’t realize it at the time. Trading financial products is complex, what Papaplatte did is, as he himself said, pure gambling.
The two also talked in the podcast about how winnings make you feel like you know what you’re doing, but in retrospect it turns out you were just lucky.
The streamer repeatedly invested the profits that Papaplatte accumulated over months. In the end he had a portfolio of around €80,000 in various cryptocoins. But no matter how high the profits were, trading with leveraged products is also risky.
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Papaplatte: “I have never felt so empty”
How did he end up losing the money? Papaplatte lost the money because he relied on so-called leveraged products. They are extremely risky and work like this:
You essentially borrow money from the platform provider you trade on in order to increase your profits. For example, instead of earning 1 euro, you earn 10 euros. Conversely, you also lose 10 euros instead of 1 euro if the price falls, and that is exactly what was the streamer’s downfall.
One evening, Papaplatte invested as usual in his leveraged product on the rise of Iota, a cryptocoin that was hyped at the time, but the opposite happened. While he was already asleep with his cell phone in his hand, the Iota bubble began to burst and, according to Papaplatte, the price fell overnight from around $4 to $1.20.
This was so much that his budget of €50,000 that he had on the platform could no longer cover further debts to the platform and the position was therefore liquidated. He lost everything with it.
The next day, I’ve never felt so empty, dude.
Papaplatte on his podcast
How did Papaplatte feel after the loss? At first Papaplatte couldn’t believe his eyes. A look at the exchange rate of the currency probably made him stumble even more, because the exchange rate had already recovered to over 3 US dollars. But because his leveraged product had already been liquidated, he lost all of his money, not just the difference in prices.
That day he started thinking more about the whole situation. “Fuck, what have I done,” he is said to have thought to himself. But instead of learning from his lesson, he made the mistake that many investors make. He let his emotions take over and tried to get the money back.
You can watch the entire podcast episode here.
How was he going to do that? He increased the risk to make back the money he lost. He tried to get the money back with the same strategy as before, but with a higher risk. However, it was precisely at this point that the entire crypto bubble began to burst and he subsequently lost the other 30,000 euros that he had left.
Trading financial products is risky, Papaplatte also had to realize that. Many game developers also saw cryptocurrencies as opportunities to make money. One made a nasty joke and told his players that his shooter was mining Bitcoin in the background.