It was the “summer of crypto love” — private Telegram groups were ablaze with altcoin (every cryptocurrency alternative to Bitcoin) chatter, Bitcoin whales were breaching the digital horizon and the crypto-community writ large was wondering when they were going interstellar. “At the time, we all thought we were going to the moon and there would be Lambos lined up on the other side,” says Kyle, a crypto community moderator. “But turns out most of us ended up with Camrys.”

Kyle is referring to the second half of 2017, when the price of Bitcoin — a decentralized digital currency commonly referred to as cryptocurrency — went from being worth $3,000 a coin in May of that year to its peak of $20,000 per Bitcoin just seven months later. “FOMO was a major talking point inside these crypto communities,” explains Kyle. “Everyone was investing on the basis of FOMO, but very few actually knew or cared about what the companies were building. It was all hearsay and hope.”

But hearsay and hope is often enough to convince someone to gamble their life on fairy dust. “I was working for a bank in Europe when a colleague told me about Ethereum [another cryptocurrency] end of 2016,” writes soundsoviel, a self proclaimed “crypto millionaire.” “That’s when I invested blindly what I had left from my savings. Boy I had no idea. It went well as you might know. I also had the right timing when I switched from Ethereum to eos [yet another cryptocurrency] one year later. My initial investment was suddenly worth about almost 100x in a liquid market. Worth about a million [dollars]. I didn’t tell anyone about that apart from my parents, my best friend and the colleague who told me about crypto.” [sic throughout]

Although he would go on to lose everything once the crypto market began to hemorrhage — he notes in the same reddit post that he’s sitting in a bar in the slums of East Africa, enjoying his “$0.60 beer in the shadow” — his story is still among the luckier ones with regard to people who attempted to ride the crypto wave only to find themselves washed up on the shore without a penny in their pocket. That’s because soundsoviel, at least, was playing with house money — others went deep into the red in the hope of striking gold and found themselves reeling in nothing but a nightmare of debt.

Case in point: redditor Crypthomie, who identifies himself as a 32-year-old living in Abu Dhabi, and who just last year posted an image of his repayment schedule for the nearly $400,000 loan he took out to invest in crypto. His schedule, which began in January 2018, will see him pay a little over $8,000 a month toward his loan until the end of 2021. “Still 3 and half years to go until I’m freed,” he wrote in 2018. “Until then, I’m working for nothing and I’m at 85 percent loss. I hope it gives you a lesson.”

Last year, he told News.com.au exactly how his investment in the crypto bubble backfired. Per the report, he bought several altcoins like Neo, Stellar, Litecoin, Ethereum and “some other shit coins,” in hopes that one of them would be the next Bitcoin, “most of which, lost 95 percent of their value.” “I’m 32, and it was my first speculative investment,” he told News.com.au. “I think it’s an age where we’re still unconscious and take lot of risk if we don’t have big responsibilities like a kid or bills to pay.”

While he’s one of the lucky few who could even afford to pay a bill that big that fast, he’s not alone in his recklessness. In 2017, a different redditor shared that he, too, took out a six-figure loan that year to invest in Bitcoin: “Today I took out a $325,239 equity loan on my house to purchase 191.118 bitcoin,” wrote the since deleted user. Another took out a $250,000 loan against his mom’s house and put it all into Bitcoin. “This dip feels like the perfect timing,” he wrote last year after the price of Bitcoin had dropped below $10,000. “LETS GOOO!!!” It’s not hard to do, either — according to City Lab, homeowners can borrow up to around 80 percent of their mortgage at an average interest rate of about 5 percent, depending on their credit score and the price of their home.

Michael Noel, the founder of Blockchain Consultants, tells me that a lot of people got burned in this kind of speculation. “There was this thing called the ICO, the initial coin offering [unlike an IPO, which gives investors ownership in a company, an ICO gives investors tokens based on the promise that they can be used once the digital platform the token is based on gets built]. It was the unregulated Wild, Wild West. People put together white papers that had a great idea, sold it to people and marketed it to people. Other people bought into it, and they raised hundreds of millions of dollars.”

Noel points to eos — the same cryptocurrency company that upended redditor soundsoviel’s life — as the peak example of how absurd the speculation around cryptocurrency became. “They [eos] raised $4.5 billion, speculated with it, took that to nine billion,” he says. “They’re still sitting on nine billion. Last time I looked at them, they had like 26 customers. [It was] really bad stuff that went on.” By “bad stuff,” Noel means that eos was essentially able to raise $4 billion “without even having a working product,” according to Hacker Noon. “In fact, when they started the ICO, they hadn’t even wrote a single line of code.” In other words, people poured in money based on the hype around the founders who had previously run other well-known blockchain (a decentralized digital ledger upon which all cryptocurrency is built) projects.

And as Joseph Borg, president of the North American Securities Administrators Association (a voluntary organization devoted to investor protection), explained to CNBC in December 2017, many people beyond the redditors above were taking out mortgages to get in on the crypto mania. “We’ve seen mortgages being taken out to buy Bitcoin. People do credit cards, equity lines,” Borg told CNBC. “This is not something a guy who’s making $100,000 a year, who’s got a mortgage and two kids in college, ought to be invested in.”

More to Borg’s point, the same CNBC article reported that roughly 18 percent of people who buy Bitcoin do so using a credit card, according to a 2017 survey by loan marketplace LendEDU. “Of those, 20 percent have not paid off their balance,” per the 2017 CNBC report. “The phrase ‘buy Bitcoin with credit’ has been trending on Google for weeks.”

Noel says that betting on crypto speculation is a zero-sum game. “Eighty percent of the time someone loses, 15 percent of the time someone wins, 5 percent of the time it’s a draw,” he says. “It’s been like this forever, and 80 percent of the time when someone loses, it’s your mom’s 401k.”

As for the type of investors taking out these ridiculously risky loans to invest in a speculative market with a shaky foundation (to put it mildly — we’re talking about an investment in nothing more than lines of computer code), Borg told City Lab that they’re usually educated, with some assets in their portfolio, but are worried about their retirement. “They earn more than $60,000 a year, and have at least an adequate handle on technology,” reports CNBC. Or as Borg put it, “If you think about it, the psychology is the same [as with the 2006 to 2007 real-estate bubble] except that this one is much quicker, the duration is faster and the leverage is higher. But it’s the same story, just compressed: Instead of a year, it’s three days.”

As Borg noted, the speculative surge behind crypto-mania is hardly a new concept with regard to so-called “financial bubbles.” There’s the housing boom that led to the 2008 crash and subsequent recession, of course. Not to mention, the dotcom boom that began in the late 1990s and continued into the early 2000s. And long before that, there was Holland’s tulip crisis of the 1630s. “Bitcoin right now has many of the elements of the tulip bulb mania we saw back hundreds of years ago in Holland,” billionaire hedge-fund manager Ken Griffin told CNBC in 2018. Back then, tulips became such a prized commodity that, when traded on Dutch stock exchanges in 1636, many people traded or sold possessions to get in on the action. “The bubble came to an end in 1637, which resulted in bulbs trading at a fraction of what they once had, ‘leaving many people in financial ruin,’” reports CNBC.

Teddy Fusaro, chief operating officer at Bitwise, the first cryptocurrency index fund, tells me that it’s tragic to hear that people were mortgaging their financial situation to make investments in Bitcoin or other digital currency assets. “We typically recommend a very small allocation — single digit percentage points — investment in cryptocurrency in an already diversified portfolio,” he says. “Bitcoin has a different set of return characteristics than most other investable assets.”

To that end, Fusaro says that allocating a small percentage of your portfolio to cryptocurrency is enough to make a difference. “The drawdown is so dramatic, and the price increase is so dramatic, it only takes a small amount to have an impact on a large portfolio,” he says. “That’s why it’s risky, and frankly, dangerous to have a large allocation to it from a portfolio perspective. Because it’s a highly speculative, highly volatile investment. That’s why you wouldn’t recommend a significant allocation to it.”

Yet it’s this very volatility that makes cryptocurrency such a desirable asset for the forward-looking gambling type. “With ICOs, you can buy them very, very low,” says Noel. “You can buy them for pennies and hope they go to dollars — that kind of speculative thing. So people that are into speculative kinds of investments are the ones that came into ICOs. Some of them lost a lot of money, some of them lost their businesses. But I’m sure that there’s a cross-section of those who have [bought] back in.”

Of course they did. Some people just never learn.