Erik Finman dropped out of school at age 15 to pursue a career as an entrepreneur. Now, he's worth over $1.5 million in bitcoin holdings.
- Nineteen-year-old Erik Finman bet his parents that if he was a millionaire before age 18, he wouldn't have to go to college — and won by investing in bitcoin.
- He explained to Business Insider Germany that there's still a lot of opportunity in cryptocurrencies.
- He's found that crypocurrencies peak and value, and there's no need to panic over lows or bubbles.
German teenager Erik Finman has an unusual success story.
When was 12 years old, he realized school wasn't his future. Of course, the majority of his classmates felt the same, but Finman took action: He made a bet with his parents.
If he became a millionaire before his 18th birthday, his parents promised that wouldn't have to go to college.
So, teenage Finman took the 1,000 euros from his grandmother meant for his studies, and bought bitcoin at a rate of about 10 euros each. He won that bet with his parents by becoming a bitcoin millionaire before his eighteenth birthday.
Finman is now 19 years old and 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 ten years and discussed the crash earlier this month.
Business Insider Germany: 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?
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 country 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 the 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 the 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 resetter to buy
Business Insider: Not only has the bitcoin collapsed, but most other cryptocurrencies have also fallen. Are you still convinced that the bitcoin is the best digital currency or do you also have other favourites?
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 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 solve 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: The 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.
Bitcoin millionaire speaks at a TEDx Teen conference back in 2014. Erik Finman
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 ten 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 ten 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 ICOs [introduction of new cryptocurrencies] 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.
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