Today, I'll recount how I, known as the monk, earned my first million in the cryptocurrency realm. While many assume I built my fortune through contract trading, my initial crypto wealth actually came from arbitrage, part of the largest and most enduring arbitrage movement in crypto history.

1. The Opportunity Emerges

At that time, I had been involved in crypto for less than a month when the strictest regulation in history struck. On September 4, 2017, seven government departments jointly announced a ban on ICOs and prohibited domestic exchanges from operating. Panic engulfed the domestic market, causing sharp declines in various cryptocurrencies. As domestic retail investors suffered the most, coin prices on Chinese exchanges fell far below those on the U.S.-based Coinbase exchange. From September 4 to September 13, mainstream coins offered an arbitrage opportunity of about 10%.

The 2017 Bitcoin "9/4 Incident"

Back then, Coinbase remained relatively obscure, and only a small group noticed the 10% arbitrage spread. However, without U.S. identities, they couldn't efficiently transfer low-priced coins to Coinbase for conversion into dollars at higher rates.

2. Early Profits

Coincidentally, a close friend of mine worked as a programmer in the U.S. with a valid work visa, enabling him to assist with cashing out from Coinbase. We partnered up: I purchased ETH and LTC at discounted prices on Bter using RMB, withdrew the coins to Coinbase, and he sold them for USD (USDT or stablecoins weren't prevalent then; selling meant converting to fiat currency). I then coordinated with foreign trade contacts to convert the USD back to RMB and transfer it to me. Each full arbitrage cycle took roughly two days. We completed five rounds by September 13, compounding our initial principal of 500,000 RMB to approximately 750,000 RMB. To better monitor arbitrage opportunities between China and the U.S., my brother developed a Python script displaying price differences for mainstream coins on exchanges in both countries.

3. Market Panic Again

On September 14, the three largest domestic exchanges—OKEx, Huobi, and BTC China—simultaneously declared they would halt new user registrations and cease all operations. Initially, after the 9/4 policy, retail investors remained cautious yet hopeful, proceeding gradually. But the exchange announcements shattered that hope, triggering widespread panic selling. Investors frantically dumped holdings at any price, causing continuous price drops. Everyone believed that failing to sell Bitcoin immediately would leave no trading venue, rendering holdings worthless. The crypto world seemed doomed, with nearly all expecting Bitcoin to crash to zero—a state of extreme panic fueled by clear negative news.

4. The Ultimate Arbitrage

Within mere hours, cryptocurrency prices halved, and arbitrage spreads peaked. Litecoin's price disparity between Bter and Coinbase reached a staggering 38%, reflecting the intense fear among domestic retail investors that day. With 750,000 RMB on hand, we pooled an additional 1.2 million RMB, totaling 2 million RMB. We invested nearly all of it to acquire Ethereum and Litecoin at their lowest points and transferred the coins to Coinbase. Due to blockchain network congestion, prices had started rebounding by the time the coins arrived, so we sold everything immediately. This single arbitrage transaction yielded about 50% profit—roughly 1 million RMB.

5. The Dust Settles

As the final wave of panic subsided, major players emerged to absorb most discounted coins, rapidly narrowing the price gap. This arbitrage movement, spanning over ten days, concluded with us securing a total profit of 1.25 million RMB.

6. Reflections and What Came Next

Despite the passage of time, I'll never forget the 9/4 incident as a crypto participant. That day, 95% of Chinese retail investors relinquished their hard-earned holdings. Reflecting on the accompanying screenshot, it captures not only Bitcoin's low of $2,800 and Litecoin's 38% spread but also imparts a stark lesson: in crypto, the despair of the majority often uncovers riches for the few. Retail investors' surrender of assets (similar to the 3/12 event) paved the way for a super bull market, with Bitcoin hitting $20,000 by year-end. When I first entered crypto, I secured low-cost assets but lacked conviction and insight, limiting gains to arbitrage. By October, mainstream coins had nearly doubled since September 14, revealing trading's potential for greater profits. So in mid-October, I reinvested 500,000 RMB and re-entered the market. The subsequent events—profiting immensely from the ICO surge and the early 2018 bull run—are likely familiar; my 500,000 RMB principal grew to 12 million RMB (my first ten million). This, however, is a tale for another time.

7. Conclusion

The "9/4 Incident" stands as a pivotal moment in cryptocurrency history. It directly catalyzed the mass migration of exchanges overseas (e.g., Huobi, OKEx, Binance refocusing internationally) and profoundly reshaped the global crypto market structure and domestic investors' engagement methods (shifting to OTC and foreign platforms). Honestly, my understanding of 9/4 might be superficial, as I was a newcomer who profited from arbitrage. Those who incurred losses by selling likely have deeper insights. Veteran participants are encouraged to share their perspectives in the comments.

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How I Made My First 1 Million in Crypto