Today, I want to share how I made my first million in the cryptocurrency space. Many people think I started with contract trading, but in reality, my first pot of gold came from arbitrage trading, and it happened during the largest, most impactful, and longest-lasting arbitrage movement in the history of the cryptocurrency space.
I. The Opportunity Emerges#
At that time, I had just entered the cryptocurrency space for less than a month when I encountered the strictest regulations in history. On September 4, 2017, seven ministries jointly issued a document clearly prohibiting ICOs and the operation of domestic exchanges. Immediately, panic spread in the domestic market, and the prices of various cryptocurrencies plummeted. Since domestic retail investors were the most affected, the price of the same cryptocurrency on domestic exchanges was far lower than the price on the US Coinbase exchange. From September 4 to September 13, there was about a 10% arbitrage opportunity for mainstream cryptocurrencies.
The "94 Incident" of Bitcoin in 2017#
At that time, Coinbase was not very well known, and only a few people in the market were aware of this 10% arbitrage opportunity. However, due to the lack of US identity, many people could not smoothly transfer low-priced coins from domestic exchanges to Coinbase and exchange them for dollars at a high price.
II. Initial Profits#
Coincidentally, a good friend of mine was working as a programmer in the US and held a US work visa, which allowed him to help me withdraw funds from Coinbase. So, we hit it off and started arbitrage trading together. I used RMB to buy low-priced ETH/LTC on Bter, then withdrew the coins to Coinbase; my friend sold them there for dollars (at that time, there were no stablecoins like USDT, so selling meant converting to fiat currency). Then, I contacted a friend in foreign trade to help exchange the dollars back to RMB and transfer them to me. This complete arbitrage process took about two days. We continued until September 13, conducting a total of five arbitrage trades, with the principal growing from the initial 500,000 RMB to about 750,000 RMB through compound interest.
During this period, to conveniently compare the arbitrage opportunities between different cryptocurrencies in China and the US, my friend specially designed a small program using Python that could display the price differences of mainstream cryptocurrencies between the two countries' exchanges in real-time.
III. Market Panic Again#
By September 14, the three major domestic exchanges—OK, Huobi, and Bitcoin China—simultaneously announced the suspension of new user registrations and the cessation of all business operations. If retail investors were still half-believing and adopting a wait-and-see attitude when the 94 policy was first introduced, once the exchange announcements were made, almost all retail investors abandoned their hopes and began a frantic panic sell-off.
People continuously sold their chips at any cost, and prices kept falling. Everyone believed that if they didn't sell their Bitcoin quickly, there would be no place to trade in the future, and the coins would become worthless, leading to the demise of the cryptocurrency space. Almost everyone sensed that BTC would go to zero, which was a super panic following clear negative news.
IV. The Ultimate Move#
Within just a few hours, the price of coins was halved, and the arbitrage opportunity reached its maximum. At the same time, the price difference of Litecoin between Bter and Coinbase reached an astonishing 38%. This was enough to illustrate how fearful and panicked domestic retail investors were that day.
At that time, we had 750,000 RMB, and seeing such a high arbitrage opportunity, we managed to gather over 1.2 million RMB, totaling 2 million in capital. We almost bought Ethereum and Litecoin at the lowest point and transferred them to Coinbase. However, due to network congestion on the blockchain, by the time the coins arrived at Coinbase, the prices had already started to rebound. Therefore, as soon as the coins arrived, we sold them all, making a profit of 50% from this single arbitrage trade, about 1 million.
V. The Dust Settles#
With the final wave of panic completely released, the big players in the market surfaced, absorbing most of the cheap chips, and the price difference was quickly erased. This arbitrage trading movement, which lasted for more than ten days, came to an end, and we made a total profit of 1.25 million RMB.
VI. Reflections and Follow-up#
Although a long time has passed, as someone in the cryptocurrency space, I will never forget the 94 incident.
On that day, 95% of domestic retail investors handed over their blood-stained chips.
Looking back at this screenshot, it not only records the lowest price of BTC at 2,800 dollars during the 94 incident and the 38% price difference of Litecoin between China and the US but also serves as a bloody public lesson from history: in the cryptocurrency space, the despair of the majority is often the gold mine for the few.
Because retail investors completely handed over their blood-stained chips (similar to the 312 incident), the super bull market of Bitcoin at 20,000 dollars at the end of the year followed. At that time, I had just entered the cryptocurrency space, and although I bought the cheapest chips, I lacked faith and deep understanding of digital currencies, so I only earned arbitrage profits. By October, most mainstream cryptocurrencies had doubled compared to September 14, and it was then that I realized that trading cryptocurrencies could bring greater returns.
So, in mid-October, I invested another 500,000 RMB to re-enter the market. The subsequent developments are well known; I caught the ICO feast of dozens of times and the super bull market at the beginning of 2018, with my 500,000 capital reaching a peak of 12 million (my first 10 million in life). These are stories for another time, which I will elaborate on when I have the chance.
VII. Conclusion#
The "94 incident" is a watershed moment in the history of domestic cryptocurrency development, directly leading to the large-scale overseas expansion of exchanges (such as Huobi, OKEx, Binance, etc., shifting their business focus overseas) and profoundly changing the landscape of the global cryptocurrency market and the participation methods of domestic investors (shifting to OTC and overseas platforms).
In fact, my true understanding of the 94 incident may not be deep enough, as I had just entered the cryptocurrency space at that time and made money through arbitrage during the 94 incident. Those who lost money and had to cut their losses should have deeper feelings. Experienced veterans can share their feelings at that time in the comments section.
from @无产阶级和尚
🔥 Solving the Problem of Accessing OKX Exchange in China#
Many exchanges' original domain names may be on a restricted list, or due to servers being located overseas, access speeds may be slow. For ordinary users, this situation is often confusing, leading them to suspect that there is a problem with the exchange itself. In fact, this is more due to the network environment rather than a service interruption from the platform. To address this situation, exchanges like OKX and Binance typically update their backup domain names regularly to ensure that users can continue to access the official website through alternative addresses.
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- OKX backup domain Overseas OKX - Need to use VPN or Alternative link
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- Binance backup domain Binance
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- Bitget backup domain Bitget
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- Bybit backup domain Bybit/Bybitglobal
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- Huobi HTX backup domain Huobi (Huobi/HTX)
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- Gate backup domain Gate.io (Gate)
🔥 Related Reading#
🔥 Useful Tools for Finding Gold Dogs#
1️⃣ Axiom Dog-Charging Tool https://axiom.trade
2️⃣ Gmgn Dog-Charging Tool https://gmgn.ai
3️⃣ dbot Dog-Charging Tool https://app.debot.ai
4️⃣ Morelogin Multi-Account Fingerprint Browser www.morelogin.com
Everyone is Searching#
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