Does this Rule Apply to Institutional Investors?

[Despairo]

You're need to look on the bigger picture, not only few people or institution which are successful by taking out loan to buy Bitcoin.

This situation is similar like you don't want to got to college because you know there are many people become successful without went to or finished their college e.g. Albert Einstein, Mark Zuckerberg, Bill Gates, Steve Jobs etc.

The real question are you really smart like them, know what you will doing and you have a big luck? if you not fulfill these 3 requirements, it's better if you shut up and finish your college first.

[karmamiu]

You're need to look on the bigger picture, not only few people or institution which are successful by taking out loan to buy Bitcoin.

This situation is similar like you don't want to got to college because you know there are many people become successful without went to or finished their college e.g. Albert Einstein, Mark Zuckerberg, Bill Gates, Steve Jobs etc.

The real question are you really smart like them, know what you will doing and you have a big luck? if you not fulfill these 3 requirements, it's better if you shut up and finish your college first.

That's exactly the case and besides that they are also confident that money will continuously roll inside their pockets without them worrying much on their position and their current standing. There are also things they need to consider such as it is an all or nothing gamble and their countermeasures to do if thing don't go according to their plans. If you compare that to any average corporations or person, they didn't have that kind of confidence and guts to take those kinds of risks. It's not that I am underestimating other people, but that's just reality and it is both fair and unfair at the same time. Some people are not cut for that role in life, and that applies everywhere either a person or a corporation.

[D ltr]

Don't borrow to purchase bitcoin

this should be the case, but people often assume that the profits will be taken too quickly, without thinking about the losses and risks if the calculations are wrong.
even though you can buy bitcoin without having to borrow from other people as long as you are patient you can also have 1 btc if you intend to invest casually

[jossiel]

Maybe.

Since they're corporation, they've got other assets that can easily pay out the debt that they've taken. They won't take a debt if they can't pay that win or lose with the purpose of the loan.

While an individual, we may still take a loan and invest it into bitcoin if we want to. But we've seen a lot of people failed with this strategy and if it you think that you'll be able to pay the loan covering it with other source of your income or by your other assets, then take the risk if you want to.

As for me, I wouldn't still do it.

that is true, they have the courage to take a multi-million dollar loan because they have other assets to fall back into. however, if you are just a regular individual with regular income, hard to stake your hard-earned money on this market.
the rule also applies to institutional investors. but they have more leeway as they have more assets under their name. and maybe profitable assets so they don't worry about waiting that long like with btc market.

Unlike some of those that have been thinking to take loans, they've got no other back ups and if they will default on a loan, the only option they've got is to sell their current assets.

For individuals that don't have that much, it's best to avoid taking loans when you're interested to invest in bitcoin.

Be content as of the moment and look for ways that you can increase your source of income.

[dragonvslinux]

Microstrategy is a company, which is a very different situation. Companies take out loans to grow their business all the time. A company taking out a loan and an individual taking out a loan are two very different things. For example a company can sell some stock to get more money, you can't just sell stock in yourself to raise money. But a company can only do this if they know their cash flow is gonna be able to handle the loan if problems occur in the market.

Yes this is point here, MSTR's loans were based on a high amount of collateral (a chunk of their Bitcoin stash). Meaning despite it being a risk, it was around $30K if not mistaken, and in the end they managed to lower their liquidation risk to $3K before paying it back due to very high collateral. In the end it was a bit of a dumb loan as there was no rush to buy Bitcoin back then, but collateral was on their side.

The difference with individual loans (non-corporate) is that time is your enemy. Bitcoin could still increase by say 2x, but if it takes a year or longer, the interest could eat you up in the meantime. The only "good" time to take a loan is if you're expecting an imminent bull market, rather than trying to buy the lows. You could buy the lows and price go sideways for a year, which will simply cost you a lot of interest.

[Ucy]

You could consider it a gamble to borrow such amount for any kind of investment in a world of uncertainty. Maybe he miscalculated & thought that buying up bitcoins will always cause the price to rise.
Anyway, I'm now having some pity for him... and may consider allowing him to recover, but that will depend on whether he really humbles himself this time & let his supporters/fans know that he isn't the reasons Bitcoin is bullish. Those fans can be quite annoying sometimes.
Bitcoin Master was alittle annoyed & considered preventing Bitcoin from reaching certain high this year just to humble those who were too sure about a massive bullish run this year, but because of this, it maybe reconsidered. He wants every true Bitcoin supporter to be happy and never regret supporting Bitcoin.
Advice him to follow the Bitcoin Master who depends on the CREATOR of the Universe and It will be well for him. Bitcoin will cross 30,000 soon... When it crosses 31,000 he should be careful but never panic.

[jeraldskie11]

Actually, that rule is only recommended to crypto beginners who don't know what the market cycle is. Usually they buy in the Distribution phase of the market so they lose money and they cannot withdraw their investment. That time is when the investment sellers comes in, so it is not recommended to invest in that phase.

The banks or institutions, they are professional traders and have a lot of experience in the market. They know that they will earn twice as much in the market if they invest in the accumulating phase, and they will surely pay off their loan immediately. That's why for me, know where the accumulating phase of the market is and invest, you will definitely benefit a lot in the distribution phase.