(CNN Business) – On the morning of April 17, two brothers in Westchester, New York, woke up to learn that they had become millionaires overnight, thanks to an unlikely bet on a cryptocurrency that was originally created as a joke. .
Tommy, 38, and James, 42, who asked CNN not to publish their last names to protect their anonymity, had invested hundreds of dollars in the cryptocurrency called shiba inu – a derivative of dogecoin, which is basically a parody of a parody. A coin was worth a fraction of a penny, but a friend, who happened to be a crypto expert, told them that he believed it could be a great source of income.
“I thought about bitcoin, which was once a fraction of a penny and now it’s tens of thousands of dollars, and this happens to people, it’s possible,” said Tommy. “I trusted my friend and thought that if it went down to zero, it was fine. I thought of it as a lottery ticket that would not expire. “
Less than two months after their initial investment in late February, their lives changed. It was his dad’s birthday, and instead of giving him a card, they made him a millionaire.
Cryptocurrency valuations skyrocketed in 2021. After years of being ignored and mocked by Wall Street, cryptocurrencies – including established players like bitcoin and lesser-known altcoins – are enjoying investor interest. without precedents. The value of bitcoin is up nearly 70% since January, and dogecoin, which started out as a joke and is still worth less than a dollar, is up more than 11,000%, according to Coindesk.
But cryptocurrencies are also extremely risky unregulated investments. Prices are known to vary wildly. Additionally, digital currencies carry other types of unique risks, such as the possibility of a server being hacked, a file deleted, or a password being lost that could leave investors without access to their funds forever.
James and Tommy rolled the dice, each initially invested $ 200. They also presented the idea to their mom, dad, sister, and a few other family members.
“My mother and sister were skeptical, but they each contributed $ 100 as well,” said Tommy. “After a few weeks, when it went up about 300%, they put another $ 100 into each one, and then it just kept going up.” In total, the group invested almost $ 8,000.
“Oh, my God!”
Before the pandemic, the brothers’ main income came from filming weddings, but in the face of the covid-19 outbreak their business almost closed. Instead of scheduling 30 to 40 weddings this year, James said, they held no more than eight.
“We fell into oblivion,” said Tommy. “The government stimulus checks weren’t enough to sustain us. I’m a positive person, but it was really difficult, and the uncertainty was a bit scary. “
As his investment in shiba coins took off, it was hard to believe the change in his fortune. While filming a wedding in mid-April, they kept half an eye on their investment, which quickly soared to $ 100,000 – and continued to climb.
“We woke up the next morning and it doubled. We thought, ‘Oh my God,’ “said Tommy.
“Then it went up to $ 700,000 and I told my brother it was going to reach a million. I kept updating my phone.
The next day it happened.
“The day he hit the million – my mother and sister didn’t think it was real.”
The family’s initial stake of $ 7,900 is now worth nearly $ 9 million. CNN Business confirmed the value through its coin wallet and transaction history.
What is shiba currency?
Shiba inu was created less than a year ago – an obvious derivative of dogecoin, which features a Shiba Inu dog as a pet. It could have been a joke of a joke, but not many people laugh now.
The value of the Shiba coin, which goes by the ticker symbol SHIB, has risen more than 11,000% in the past 30 days, according to the CoinGecko site.
Earlier this week, ethereum co-founder Vitalik Buterin made headlines by donating $ 1 billion in shiba coins to a covid-19 relief fund in India.
The cryptocurrency, informally known as memecoin or altcoin, has also garnered a handful of famous backers, from former boy band stars to NFL pros.
As is the case with Backstreet Boys star Nick Carter, who is frequently seen tweeting the hashtag #Shiba and #ShibArmy.
“As a cryptocurrency enthusiast and investor, seeing the announcement about the donation of SHIB and ethereum creator Vitalik Buterin to India was very exciting,” Carter told CNN Business in a statement. “I believe there is an incredible future for Crypto, especially knowing how it can be used for good and more importantly, to save lives.”
NFL star Antonio Brown tweeted on wednesday to his more than 1 million followers that he has also invested in this cryptocurrency.
“The shiba business is booming and crypto is the way to go,” Brown told CNN Business on Thursday. “It is a new way of investing.”
There are thousands of cryptocurrencies, and bitcoin and ethereum account for nearly two-thirds of the $ 2.3 trillion global crypto market. And while they can be quite profitable, as James and Tommy have learned, they are also extremely volatile.
For example, bitcoin, by far the most established cryptocurrency in use today, plunged 12% this week after Elon Musk reversed Tesla’s plans to accept bitcoin as payment, citing environmental concerns. And dogecoin, a cryptocurrency Musk has regularly touted on Twitter, plunged nearly 20% after Musk’s appearance on “Saturday Night Live” last weekend.
Tips from Tommy and James
As for how Tommy and James plan to use their money, they are not entirely sure. They have yet to fully withdraw their investment and are waiting for something called ShibaSwap, a decentralized exchange platform.
“This has happened so fast that it is difficult to even understand the things that can be done with this money,” said Tommy.
But the first order of business is to help mom and dad.
“My parents’ house needs a new roof, so I’ll take care of that.”
For anyone thinking of trying to replicate the siblings’ great success, James offers a warning: “Don’t put money in that you’re not willing to lose,” he said. “Meme tokens are very high risk and you really don’t know what is going to happen to them. We know that this is not what normally happens, although shiba has changed our lives. When you see that it fluctuates so much, it keeps you awake at night.
CNN Business’s Paul R. La Monica contributed to this article.