How_I_Earned_My_First_Million_in_Crypto

binancevip (37)in #okxapp • 3 months ago

Today, I'll share how I, the monk, earned my initial million in the cryptocurrency realm. Many assume I built my wealth through contract trading, but in truth, my first major crypto profit stemmed from arbitrage, which was part of the biggest and longest-running arbitrage wave in crypto history.

1. The Opportunity Emerges

Back then, I had barely entered the crypto space for under a month when the most severe regulatory crackdown ever occurred. On September 4, 2017, seven government agencies jointly announced a ban on ICOs and halted domestic exchange operations. Fear swept across the local market, causing various cryptocurrencies to plummet sharply. Since domestic retail investors were hit hardest, coin prices on Chinese exchanges fell far below those on the U.S.-based Coinbase exchange. From September 4 to September 13, mainstream coins presented an arbitrage gap of around 10%.

The 2017 Bitcoin "9/4 Incident"

At that time, Coinbase remained relatively obscure, and only a small circle noticed the 10% arbitrage difference. However, lacking U.S. identification, they couldn't smoothly transfer low-priced coins to Coinbase to swap for dollars at higher rates.

2. Early Profits

By chance, a close friend of mine worked as a programmer in the U.S. with a valid work visa, enabling him to assist me in cashing out via Coinbase.

We partnered up. I purchased ETH and LTC cheaply on Bter using RMB, withdrew the coins to Coinbase, and my friend sold them for USD (since USDT and stablecoins didn't exist then; selling meant converting to fiat currency). Next, I connected with foreign trade contacts to exchange USD back to RMB and transfer it to me. Each full arbitrage cycle took roughly two days. We completed five rounds by September 13, growing our initial 500,000 RMB principal to about 750,000 RMB.

To better monitor arbitrage opportunities between China and the U.S., my friend even developed a small Python program that displayed price differences for mainstream coins across the two countries' exchanges.

3. Market Panic Again

On September 14, the top three domestic exchanges—OKEx, Huobi, and BTC China—simultaneously declared they would stop new user registrations and cease all operations. When the 9/4 policy first emerged, retail investors were cautious but hopeful, proceeding step by step. But after the exchanges' announcement, nearly all retail investors lost hope and began panic selling.

People dumped their holdings at any cost, driving prices down further. Everyone believed that if they didn't sell Bitcoin immediately, there would be no trading venues left, rendering their assets worthless. The crypto world appeared doomed, with almost everyone expecting BTC to crash to zero. This was extreme panic fueled by clear negative news.

4. The Ultimate Arbitrage

Within just hours, coin prices halved, and arbitrage spreads hit peak levels. Litecoin's price gap between Bter and Coinbase reached a staggering 38%, illustrating how terrified and panicked domestic retail investors were that day.

We had 750,000 RMB on hand, and seeing such a massive arbitrage opportunity, we pooled an additional 1.2 million RMB, totaling 2 million RMB. We used nearly all of it to buy Ethereum and Litecoin at their lowest points and transferred the coins to Coinbase. Due to blockchain network congestion, by the time the coins arrived at Coinbase, prices had already started rebounding, so we sold everything immediately. This single arbitrage alone yielded about a 50% profit—roughly 1 million RMB.

5. The Dust Settles

As the final wave of panic subsided, major players behind the scenes emerged to absorb most of the cheap coins, and the price gap narrowed rapidly. This over-10-day arbitrage movement concluded, and we netted a total profit of 1.25 million RMB.

6. Reflections and What Came Next

Although much time has passed, as a crypto participant, I'll never forget the 9/4 incident.

On that day, 95% of Chinese retail investors surrendered all their blood-stained holdings. Reflecting on this screenshot, it not only captures the 9/4 incident's BTC bottom price at $2,800 and the 38% Litecoin spread between China and the U.S., but also delivers a harsh lesson—in crypto, the despair of the majority often becomes a gold mine for the few.

Because retail investors completely gave up their blood-stained chips (similar to the 3/12 event), the super bull market emerged by year-end, with Bitcoin soaring to $20,000. When I first entered crypto, I bought the cheapest chips but lacked conviction and insight, so I only profited from arbitrage. By October, mainstream coins had nearly doubled since September 14, making me realize trading could yield even greater returns.

So in mid-October, I reinvested 500,000 RMB and re-entered the market. The subsequent events are likely familiar—I rode the ICO wave with tenfold gains and the early 2018 mega bull market. My 500,000 RMB principal ballooned to 12 million RMB (my first 10 million in life). But that's another tale, which I'll share when time permits.

7. Conclusion

The "9/4 Incident" marks a pivotal moment in crypto history. It directly triggered exchanges moving overseas en masse (Huobi, OKEx, Binance, etc., shifted focus abroad) and profoundly altered the global crypto market structure and domestic investors' participation methods (turning to OTC and overseas platforms).

Honestly, my grasp of 9/4 might still be shallow since I was new to crypto and benefited from arbitrage then. Those who lost money by cutting losses probably feel it more deeply. Experienced veterans are welcome to share their thoughts in the comments.

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