How the Chinese Bitcoin tycoon rolls a billion dollars
9/29/2022
A Korean-Chinese child from Yanbian, northeast China, a student majoring in accounting and macroeconomics, a sales god who can sell anything, and a top-notch TOEFL instructor with a salary of billions of dollars, Li Xiaorai, who has repeatedly transformed, was named among the early investors in Bitcoin. . His first investment, which bought 2100 bitcoins, was not very successful. But after he started buying bitcoins again, he seldom sold them.
From then on, he started investing in bitcoin-related fields. Regarding the BitFund (比特基金) he created at the time, he said, "It started with $3.5 million, but five years later, it has grown to $150 million, 58 times in August 2018."
- What is the current total investment?
“The investment target is mainly blockchain, and most of the assets held are digital currencies. Due to its high vulnerability, it can drop by 40-50% in an instant, so speaking in numbers (fiat currency) is meaningless. That's roughly $10 billion. Assets are stored in an anonymous cold wallet.”
Major Investment Targets Bitcoin, EOS, Mixin Network
- What is the main investment target?
“It is a mainstream digital asset. There is Bitcoin, there is no Ethereum. And EOS and Mixin.one. As you may not know about Mixin, it is a multi-purpose wallet that can store any blockchain assets without safety concerns. Currently, the Ethereum wallet can only store Ethereum, and the EOS wallet can only store EOS. improved this. Mixin is said to be a next-generation blockchain, but it does not use blockchain technology. In fact, a true blockchain is only suitable for Bitcoin. nothing else Ethereum is the biggest technical failure. Still, it is welcomed by people. Even if the transaction time is reduced a bit, it is too slow to use. If there is only one contribution, is it the issuance of coins? That doesn't mean I've completely shunned Ethereum. Winbee (云Q, yunbi.com, now BigONE), an exchange founded with the support of a bit fund, was the first Ethereum exchange at the time.”
- Also known as a major investor in EOS.
“In terms of blockchain technology, what Ethereum can do, EOS can do. The goal of creating a decentralized computer is the same for both. However, Ethereum took the proof-of-work (POW) method and was inefficient. EOS has improved its efficiency with the Delegated Proof of Stake (DPOS) method. If EOS can't succeed, I don't know what other models are possible. Isn't everything else speculative? I invested in all 4 projects Dan Larimer (founder of EOS) did before EOS. Of course, I also invested in EOS, and when I actually started a business, I was also part of it.”
- How do you find an investment target?
“The most important habit is to keep studying on your own. He studied accounting and computer science in college. After he graduated, he studied sales. Even when he taught English, he had no choice but to study on his own. After his exposure to bitcoin, he also studied on his own. There was no one to help me, so I had to do it alone. As bitcoin rose, I gained capital and gained experience, so I became an investor. Constant learning is my constant competitive edge. When you learn something, you do it like crazy. I get distracted and concentrate, then I go home and sleep. It's always been like that. Then you don't even know what's going on in the world."
-What was the reaction of those around you after you made a lot of money by investing in cryptocurrency?
“At first, the people around me didn’t know much about my field of interest. It was like doing something crazy again. Then he said that he had a lot of money, and he said, ‘Why didn’t you tell me about it in the first place? It’s friends and family. I'm a person who has published all my stories on the internet, but does it make sense that I didn't tell them? And many people ask if I should buy it now. I just said don't buy it. How can you bear with $10 going to $1 in one morning, going up to $100 the next day, and then dropping to $10 again? Isn’t that abnormal? (laughs)”
- Do you not invest in other fields such as real estate or stocks at all?
“I do not invest in real estate. The house I live in now was also bought by Mao Lao (老猫, Li Xiaorai's business partner, a blockchain investor, real name Wen Zhuo Wen WenhL). Real estate does not create value on its own. When you buy a house and sell it, people want to sell it with more on top. So the price goes up. But the value doesn't go up. The underlying cause of this price increase is lending, so half of the price is imaginary. That's a debt, not an investment. Real estate is not a good investment because it cannot be sold arbitrarily and has low liquidity. stocks have We are preparing a stock-related ETF (exchanged exchange fund) under the name of Odyssey.”
It seemed intentional that Li Xiaorai listed Bitcoin, EOS, and the Mixin Network as his assets today. In the second half of 2019, he launched an ETF named BOX. It is a product that reflects Bitcoin (B), EOS (O), and Mixin Network (X) in a ratio of 1:1500:8, and in the end, it is a structure that bundles the assets that Li Xiaorai believes the most. BOX is left to the system and index, but is not managed separately, and is labeled with modifiers such as 'completely open' and 'completely transparent'.
“I didn’t criticize the leek. i encourage Let's make a leek day"
The Chinese cryptocurrency industry sees BOX as Li Xiaorai's 'return work'. Li Xiaorai started promoting BOX in earnest on July 3, 2019, during the so-called 'Leek Festival' event. The origin of the leek festival is the day Li Xiaorai's 'Recording Gate' exploded on July 3, 2018, a year before that. As the expression “cutting the leek” (割菜) appeared in the recording, resentment against Li Xiao-Lai grew. This is because 'leek' is a derogatory expression for individual investors (ant) in China.
Leeks have strong adaptability to both hot and cold environments, so they are easy to cultivate and can be harvested several times. On the one hand, the farmer (organization, major shareholder) gives the leek fertilizer and water, and nurtures it with sincerity. At the same time, on the other hand, they are rethinking the time to sharpen and cut the sickle. Even if the farmer makes fun of the sickle once or twice, all the leeks will be cut down. The cut leek will be eaten by someone, but the leek will grow back quickly anyway. As if a group of individual investors left the stock market after a huge loss, but soon other individual investors rushed back into the stock market.
People in the public expressed their sense of betrayal, saying that Li Xiaorai, who once guided them to the new world of cryptocurrency, compared them to leeks and cut them down. Li Xiao Lai hurriedly clarified, saying that he had never used the word 'leek' in his entire life. At the same time, he announced that he would 'suspend all activities' in a sense of responsibility. In the actual 30-minute recording, the expression 'leek' was not Li Xiaorai's words. After appealing for his injustice, he said that he himself was no different from a leek, and two months after the incident, he published 'Self-cultivation of Leek' . Li Xiaorai also named July 3, 2019, a year later as Leek Festival, and held a large-scale online event called "Recording Gate's 1st Anniversary." He also promoted the mix-in network he promoted and BOX-related extensive publicity. About 10,000 people participated, and Li Xiaorai himself gave a lecture.
-How did the recording gate happen?
“Someone came to me, and that’s my personality. I'm not a great person, so when someone comes, I just meet him. When someone comes to visit me politely, I am also politely greeted. He asked me for opinions, so I spoke faithfully. However, he used a lot of vulgar expressions while speaking. (Laughs) He recorded this conversation and uploaded it to the Internet. I don't know why. It was a time when everyone was losing money because it was a bear market, and people who were hostile to me wrote their own articles and framed me. But what a lot of people have really seen is that basically what I'm saying isn't wrong. At the time, I said that Sun Yuchen (Tron founder, Justin Sun) was a scammer, but he's a scammer. Everyone knew I was right.”
-If you look at the contents of Leek's self-discipline book, it seems that he always emphasizes long-term investment.
“If there is one thing that is most important for successful investing, it is long-term investing. All successful investors, regardless of race or nationality, are of the same mind. hold long term It is a question of what my investment will be like in 10 or 20 years. If you don't consider long-term investments, you won't understand why Warren Buffett invests in Coca-Cola and not Apple. Apple's business prospects look much better to anyone, but Buffett chooses Coca-Cola. because of R&D costs. R&D costs are a huge burden in the development of a company. Coca-Cola doesn't need R&D, but Apple does. When you start taking a long-term view, you will see this.”
-Are you making long-term investments in Bitcoin? Have you ever sold?
“I never sold it. always buying I keep buying bitcoins with the money I earned elsewhere.”
- So when should you sell your investment?
“This is the part that people don't understand very well. When the price rises to the point where you can't use it all, you sell as much as you want to sell. The trading market is not a place to make money. Everyone thinks it's a place to make money, so they think about when to sell as soon as they buy. It's not about making money outside the trading market, and growing money inside the market. If it is difficult to live on the income you earn outside the market, these words are meaningless to you. But what if there are more? Let's see the eggs. The yolk is money to live on, and the white is money to keep in case of illness or injury in the family. The shell out there is money to invest. Put the skins in the market and grow them. The skill to make money will increase as you do it.”
Li Xiaorai's confidence came from her own experience. She made a lot of money from business and lectures, and had to spend a lot of money for her father's hospital bills, and in the meantime, she was eager to learn new things and a new world. A successful investor and entrepreneur, he is currently investing in various projects and platforms through Inblockchain, China's largest blockchain-related investment company. In October of last year, he even disclosed his investment in BTCMEX, a European derivatives exchange. Moreover, several publications documenting his own investment records have placed him on the list of best-selling authors. He said he now pays his usual living expenses only from his book royalties. Based on this experience, Li Xiaorai's conclusion was that he would like to spread his investment knowledge in the future.
- Is there anything you want to contribute to the world?
“Our society does not teach important investment knowledge. I am very sorry. The world doesn't teach children how normal people make money. And then it demonizes making money. Just like you can't make a lot of money if you don't do bad things. This is a very big mistake. Every individual has the opportunity to make money openly and legally. It also has a chance to make big money. Ordinary office workers also openly and legally earn money, but only small. Prominent investor Warren Buffett has no secrets. He reveals to everyone what he sees and where he invests. Investing is a very important opportunity for ordinary people. should be taught well. too bad. So he wrote a book. In the future, I don't care what my child wants to do, dance or do art. I just want you to do one thing. He wants to teach that when you make more money than you have to spend, you have to invest that much to make it bigger.”
- Teach you what to invest in.
"need. Which is more risky, banks or stock markets? 99.9999% would say the stock market is risky. But not investing in the stock market is much more risky. 'Stocks for the Long Run' , there is a section comparing the change in the value of the US dollar with gold, bonds, and stocks over 200 years. A dollar 200 years ago has shrunk 95% to only 5 cents today. Gold has quadrupled. Short-term bonds increased by 281 times, long-term bonds by 1,700 times, and stocks by 700,000 times. Although cash appears stable, it continues to depreciate in value. When you stand on the Earth, you think it's flat, but it's actually spherical, so it's like going down. If you watch the stock market on a daily basis, it may seem like a lot of risk, but in the long run, it's not. When Coca-Cola went public in 1919, it grew 1.71 million times over 100 years at an average annual rate of 15%. There is no such education.”
Life is made up of several 'lifetimes'
Li Xiaorai is not stingy in spreading the knowledge she has acquired. All of his books website can be downloaded for free from However, he is still evaluated as a 'controversial person'.
The aftermath of 'Recording Gate' did not go away completely. Sun Yuchen was not the only one who shot an arrow of criticism in the recording file. He called Binance a “scammer exchange,” and said of its CEO, Zhao Changpeng, “I have a bad personality. The truth is, I don't know much about technology." As for Ethereum, he said that it was only floating as it is now because the People's Bank of China suddenly blocked the withdrawal of bitcoins, so it was a reflex profit. Ripple (XRP) denigrated it, saying, “The core team has all left, but SoftBank did not recognize it and supported it.” Litecoin and NEO also criticized each as “X-like projects”. Li Xiaorai's rant, "I'm telling the truth anyway, and people say it's not wrong" is proven by the support of many netizens, but there are also many characters who are uncomfortable with his speaking style. At the same time, some question his investment style and success.
Li Xiaorai explains in the book 'Seven years is a lifetime' (七年就是一飉子) that her life is a life that repeats several 'lifetimes'. He said that he left the university and started a business, then quit the business in 2000 at the age of 28 and taught English in Shindongbang. After leaving Shindongbang, he started his life as a businessman and investor in 2008. He started running a paid community that regularly invests a set amount from last year. The paid community in the form of a group chat room is Li Xiaorai's own investment and social contribution method. “The Bit Fund, which went out of operation last year, returned a 48-fold return to investors over five years,” he said.
“There are good things about having a community. Investing a fixed amount on a regular basis alone is a bit silly, but if you do it together, people who don't will look stupid. You give yourself a lot of value. The reason I insist on a 'Zero Fee, Zero Carry' policy for BOX ETFs is because I don't want to fill my wallet with other people's money. I have to earn my own money. The Courage Index is how much money you put into your own fund. I'm buying BOX with the money I earned outside the market. If you do so, you can also gain leadership positions. In this day and age, what matters is not money, knowledge, or appearance, but influence.”
Finally, we asked him about the situation of blockchain and cryptocurrency in China and his thoughts on the Korean market.
-The world is paying attention to DCEP, China's central bank, the People's Bank of China's own digital currency. There was also President Xi Jinping's remarks about fostering the blockchain industry. What will the Chinese government's attitude toward the cryptocurrency industry be?
“The People's Bank of China DCEP will take longer than expected. China has a foreign exchange management policy. For this reason, it is not easy to issue blockchain currency based on openness. However, there are many opportunities for applications of blockchain technology to be created. As the government attaches great importance to it, various fields will try to realize real-world use cases of blockchain, and it will happen quickly. This is, of course, an issue that has nothing to do with coin price or investment. But contrary to what the outside thinks, the Chinese government is quite friendly with Bitcoin. I've never said it's banned. The same goes for cryptocurrencies. It's just what the general public thinks. The tightening of regulations in September 2017, often considered a 'ban', did not mean that cryptocurrencies were banned, but that there were so many scams that it was necessary to do something. When the concept of 'decentralized currency' was introduced in the early days of Bitcoin, misunderstandings arose as 'anti-government' and 'de-government', but the Chinese government did not say anything. Rarely is he tolerant. So, the current reality of the Chinese cryptocurrency industry is no different from dealing with Bitcoin outside of China. It’s just preventing fraud.”
China's digital yuan will take longer than expected
- From that point of view, what do you think will happen to Libra, which Facebook released its white paper on?
“Like the People's Bank of China DCEP, it will come true someday, but it will take longer than expected. Touched too many people's cakes. It is very difficult to reconcile the financial and monetary interests of so many countries. In China, there is still only one cake box, but Libra has a lot of cake boxes. In the future, someone has to do it, and if Facebook doesn't, someone will. But now they've touched too many places, and many countries say they don't accept it."
- Do you have any special feelings in Korea? Is there anything you would like to suggest to the Korean cryptocurrency market?”
“Countries and peoples don’t mean much to me. I don't know much about Korean-Chinese (Koreans) who were born and raised in Korea, but I am a Korean-Chinese who grew up in a foreign country. People like me have characteristics in their growth process, and they try not to define a person as a person. No matter which country you go to, they don't tell you they're yours, so you end up wanting to break away from that concept and become an internationalist. Nationality is not an important concept. There are many participants in cryptocurrency trading in Korea, but I am not sure about the technological development. However, if you look at the familiarity with virtual assets and the participation of the general public, it seems that it can fit well with the direction of the blockchain. It is a place with great potential. I often hear about exchange hacking, but most exchanges are places where various problems occur.”
