Bitcoin crorepati: How Amitabh Bachchan made Rs 114,00,00,000
Cryptocurrencies have seen stupendous growth this year.
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Be it tech or financial circles, cryptocurrency – especially Bitcoin – is at the centre of conversation everywhere. During the last couple of months, the Bitcoin wave has taken many businesses and individuals on a ride and left them in greener pastures.
Close to home, the "Badshah of Bollywood" — Amitabh Bachchan — and his family have benefitted greatly from the cryptocurrency boom, according to a report published in The Economic Times. In May 2015, the superstar and his son Abhishek invested had invested $2,50,000 (approximately Rs 1.6 crore) in Meridian Tech Pte — a Singapore based firm founded by Venkata Srinivas Meenavalli.
In 2017, that investment has soared to more than $17.5million (Rs 114 crore; read that as Rs 114,00,00,000).
How did Big B make those millions?
Though Big B's investments were not directly made into Bitcoin or any other cryptocurrency, the veteran actor must thank the cryptocurrency madness for making hundred-fold profit on his investment.
At the time of buying shares in the Singapore-based company, one of Meridian Tech's prime assets, Ziddu.com, was classified as a "cloud storage and e-distribution startup", but in December 2017, it was acquired by another Meenavalli-backed overseas company LongFin Corp just two days after the latter's listing on NASDAQ.
This change also saw it change from being a facilitator of cloud storage to now being described as "a Blockchain technology empowered solutions provider" that offers microfinance using "cryptocurrencies across continents." And that's where the magic happened.
Almost overnight, thanks to magic words like "blockchain" and "cryptocurrencies", the LongFin stock rose more than 1,000 per cent last week and finally surging more than 2,500 per cent last Friday (December 15) when the deal to acquire Ziddu.com was announced.
According to the report, "In lieu of their holding in Meridian Tech, Bachchans received 2,50,000 shares of LongFin following the asset purchase."
At Monday's (December 18) LongFin stock price of $70 a share, Bachchans' holding in LongFin which like we mentioned above is valued at $17.5 million (and at the current exchange rate, it is approximately Rs 114 crore).
[Photo courtesy: Free Press Journal/ BL Soni]
How is Ziddu making money from blockchain?
LongFin, in a press release, has explained that Ziddu does micro-lending against warehouse receipts through "Ziddu Warehouse Coin", which the company says "is a smart contract that enables importers and exporters to use their Ziddu coins that are loosely pegged to Ethereum and Bitcoin Crypto Currency".
This Ziddu Coin, the company claims, is then converted by exporters into more widely accepted cryptocurrencies such as Ethereum and Bitcoin, which have skyrocketed in value this year. Bitcoin, for example, started from $780 on December 12, 2016, and briefly crossed a stupendous exchange rate of $19.5k.
What's driving the cryptocurrency growth?
To explain this, the best example would be the almost meteoric rise in value the Bitcoin has seen over the last few months. This growth has majorly been fuelled by more and more investors looking at ways to ride the cryptocurrency wave. A gradual increase in the places where Bitcoin can be used has also contributed to its continued growth in popularity.
Even though cryptocurrencies remain largely unregulated – except for Japan which, earlier in the year, passed a law to make Bitcoins a legal payment method – many banks, including Barclays, Citibank, Deutsche Bank and BNP Paribas, looking at ways to safely invest in Bitcoins and other cryptocurrencies through secure financial instruments has also led to increased interest in their value.