bitcoin balance vs fiat debt?

[HardyGoodsLtd]

so lets just set this scenario, not that its me but just so I can understand peoples view on long term bitcoin, this scenario might be true with many people, as I keep hearing of people selling their house for bitcoin, then price plummets even further, So let say someone is in real world debt for 100k say mortgage and credit card, but also holds just over that in bitcoin, who here would just sell out and become "debt free" if there were such a thing lol, or those that would keep the bitcoin as it can become of much more value in the near future compared to the debt build up of interest and such? baring in mind that clearing the debt means a steady buy back of bitcoin over the following months?

your thought please, this would help me greatly.

[Awesomus Maximus]

Debt is one of the worst things people can find themselves in. I would try to stay out of debt regardless of the reason I am in debt in the first place. If I have to sell my bitcoin stash just to be debt free, I would do that. Once out of debt, I would try to start saving money, and my savings would be in bitcoin. I think this is more sensible than going into debt just to hold bitcoin no matter how much you love holding it.

[Pmalek]

I agree with Awesomus Maximus. If you are in debt, facing issues like loosing the roof over your head, or you are putting your family's life and health at risk there is no reason to hold on to your crypto in hope that its price will one day go up. You can always get more Bitcoin, but you might not be able to get your loved ones or your home back.

[o_e_l_e_o]

If I have to sell my bitcoin stash just to be debt free, I would do that.

This is absolutely the sensible option. Replace bitcoin with stocks, shares, gold, whatever you want, and it still holds true.

In any smart financial plan, after building up a small "emergency fund" of quick-to-access fiat for paying for true emergencies like burst pipes or car breakdowns, then the next step is to pay off all high interest debt - credit cards, store credit, loans, etc. Only once your only remaining debts are things like a low interest mortgage or student loan, should you consider investing your money elsewhere. If you have a crap mortgage deal and are paying way too much, I'd pay that off first too.

Risking a guaranteed $100k fiat debt and the compounded interest payments, compared to the potential and certainly not guaranteed gain on $100k worth of BTC (and also the potential loss on BTC), it is absolutely not worth it. Cash out, pay off your high interest debts, then re-invest what you can afford to lose. If you are in debt, then you are already in a net-deficit and you don't have anything you can afford to lose.

[madnessteat]

I fully agree with the comments above. Stay away from debts, they will only bring trouble to your family. Investing not your money in bitcoin is very dangerous. This mistake can cost you a lot.

[HODL2090]

as I keep hearing of people selling their house for bitcoin, then price plummets even further

Firstly, no one should sell their house or any action that would leave them in debt in a bid to own bitcoins. Only invest spare money considering the risk and reward ratio.

You have been answered already, being debt free takes precedence over any potential reward from hodling. You can use the same risk reward ratio.

[gentlemand]

Everyone has a different appetite for debt. Some don't blink in the slightest, others get eaten alive by it.

If it were me absolutely no way would I get rid of all my BTC to be debt free. But I would not have gotten into debt in the first place and I DEFINITELY would not part with the roof over my head and retain the debt for something like BTC.

If you could clear it all now and have enough earning power to buy back BTC then I'd consider it.

And this guy put the money from his house sale in BTC, no debt involved though - https://bitcointalk.org/index.php?topic=508254.0

[o_e_l_e_o]

And this guy put the money from his house sale in BTC, no debt involved though - https://bitcointalk.org/index.php?topic=508254.0

He's been inactive since 2016, but claimed he still was holding all 648 of the BTC he got for selling his house. The news article stated his house was valued at $405,000, so he would have sold at around $625 per BTC, ignoring fees and all the rest of it. He said he held through the dip to $200, which would have cut his investment to $130,000, but at peak levels at the end of 2017, he would have been up to around $12 million. Wonder if he sold.

If you've got the spare cash or property to do this, and you don't care if you lose it all, then sure, go for it. If you are considering selling or remortgaging the house you are living in to buy bitcoin, you are crazy.

[galaxyuntreated]

Debt is the worst thing to find yourself it. You will be stuck there until you pay it off since but it all depends on how you risk it. Spending more and leaving the debt behind will just accumulate it.

[squatter]

so lets just set this scenario, not that its me but just so I can understand peoples view on long term bitcoin, this scenario might be true with many people, as I keep hearing of people selling their house for bitcoin, then price plummets even further, So let say someone is in real world debt for 100k say mortgage and credit card, but also holds just over that in bitcoin, who here would just sell out and become "debt free" if there were such a thing lol, or those that would keep the bitcoin as it can become of much more value in the near future compared to the debt build up of interest and such? baring in mind that clearing the debt means a steady buy back of bitcoin over the following months?

Living debt-free is incredibly liberating. Everyone's situation is different, but I'd sell out and pay everything off. You could drastically increase your discretionary budget after cutting out loan payments and then get right back to re-accumulating Bitcoin.

[pooya87]

this is not really bitcoin related question though!
it works in any other case in any other market, people are doing the same things all around the world in all the markets. they sometimes take really high risks such as taking a second mortgage on their house to buy stocks or participate in some IPO. we in cryptocurrency market have the same scenarios too. people sometimes take huge risks.

what these people do next depends on their plans. usually these type of people don't have any plans, they had "dreams" of getting rich fast and got into a market that they don't understand. and because of that they usually do a panic sell exit at a big loss, some of them return later when the price went up to do another panic buy when it is too late and then do another panic sell to lose money for the second time and give up then.

and that is one of many reasons for high volatility of bitcoin price.

[Flash Cunt]

This is really a multi-faceted question, and you need to consider the reason you are considering going into debt. Debt is slavery, so the decision shouldn't be taken lightly.

Credit card debt - the interest rates are enormous, so you should always clear your balance when the payment is due. If you are unable to do this, then you need to take steps to reduce your expenditure or increase your income.

Speculation - This one is a bit harder, and I've used short term loans to make money. You need to watch the interest if any, and you need to be able to cover any losses if they happen. Examples are - running a business with a 30 day credit line, and using the credit to supply corporations. You need to monitor this very closely to make sure you don't build a problem. Another example is buying a car for repair, and selling it quickly for a substantial profit.

Your house - You should be able to negotiate a very low interest rate for this type of loan, and it can make sense if the repayments including interest are less than you would pay for  rental.

Fripperies - if you can't pay cash for them, then do without.

Food and daily expenses - never use debt to pay fer these. If you haven't got the money to buy food, then do something to earn some money, cut somebody's lawn or clean their windows for example. Alternatively,cut down on food purchases. Nettles are very healthy when boiled, and you can probably find them for nothing.

Bitcoin is extremely volatile, and I believe the long term prospect are good. However, you shouldn't buy Bitcoin unless you can afford to tie up the money for at least two years in my opinion.

[o_e_l_e_o]

Speculation - This one is a bit harder, and I've used short term loans to make money. You need to watch the interest if any, and you need to be able to cover any losses if they happen. Examples are - running a business with a 30 day credit line, and using the credit to supply corporations.

This is very different to what most people here would think of as "speculation", which is taking a loan to buy bitcoin or some other coin to trade with. Incredibly risky, and not recommended.

Your house - You should be able to negotiate a very low interest rate for this type of loan, and it can make sense if the repayments including interest are less than you would pay for  rental.

Even if your mortgage repayments are higher than they would be if you were renting, it can still be a good financial decision. If you rent for 30 years you have literally nothing to show at the end up of it except money down the drain. If you pay a mortgage for 30 years, even a slightly more expensive one, at least after 30 years (for example) you own some property, which is usually quite a good store of wealth. That's not to say you should put up with an expensive mortgage though - always shop around and haggle for the best price.

[manfredmann]

I agree with Awesomus Maximus. If you are in debt, facing issues like loosing the roof over your head, or you are putting your family's life and health at risk there is no reason to hold on to your crypto in hope that its price will one day go up. You can always get more Bitcoin, but you might not be able to get your loved ones or your home back.

Family first before anything else. There will be a time to earn money. Spend quality time with love ones and for sure there will.be no regrets in the near future. Money is.not that important but since we can buy things to make the family happy then it became important. However, it should not be put as the first priority.

[bitmover]

If I have to sell my bitcoin stash just to be debt free, I would do that.

This is absolutely the sensible option. Replace bitcoin with stocks, shares, gold, whatever you want, and it still holds true.

In any smart financial plan, after building up a small "emergency fund" of quick-to-access fiat for paying for true emergencies like burst pipes or car breakdowns, then the next step is to pay off all high interest debt - credit cards, store credit, loans, etc. Only once your only remaining debts are things like a low interest mortgage or student loan, should you consider investing your money elsewhere. If you have a crap mortgage deal and are paying way too much, I'd pay that off first too.

That's Right.

Debt is terrible for any personal finance plan, and anyone should focus on the opposite: invest your money , like lending it.

Where I live one of the best investments is called treasure direct, which is a plataform where you can lend money to the government. So you receive the interests, you don't pay them.

Every dollar you can save may work for you, to make more money. If you are in debt, you have to pay more and more money over the time...

Bitcoin is a nice to invest only after you have your emergency fund and no mortgages.

[Juggy777]

so lets just set this scenario, not that its me but just so I can understand peoples view on long term bitcoin, this scenario might be true with many people, as I keep hearing of people selling their house for bitcoin, then price plummets even further, So let say someone is in real world debt for 100k say mortgage and credit card, but also holds just over that in bitcoin, who here would just sell out and become "debt free" if there were such a thing lol, or those that would keep the bitcoin as it can become of much more value in the near future compared to the debt build up of interest and such? baring in mind that clearing the debt means a steady buy back of bitcoin over the following months?

your thought please, this would help me greatly.

I believe the simple way to answer this question is to consider two scenarios, one where you're in prison for non payment, two you have paid and are out carefree. I would sell my bitcoins, as I'll always remember Bitcoins were created to provide me freedom rather than trap me in jails of debt. One can always earn and buy bitcoins ahead, but lost reputation can never be brought back do remember that.

[leowonderful]

I actually did have debt and Bitcoin at the same time back near the ATH and sold off a good portion of my holdings to cover the debt and saved the rest that I had at $17k. I've never had a lot of debt and I believe long-term in everything backing Bitcoin and altcoins alike, but if there comes a time where I do need to pay off a significant debt, I'll sell as many coins as I need to pay off the debt. I do plan pretty well to avoid any potential debts I might get into in the future, though, so I don't anticipate selling to pay anything off anytime soon.

[o_e_l_e_o]

One can always earn and buy bitcoins ahead, but lost reputation can never be brought back do remember that.

That's actually a very good point which has been missed so far. If you sell all your bitcoins because you need the fiat, then sure, that sucks, but you can always just buy more when you are in a better financial position. If you default on your debt or loans, then you can quite easily end up losing your possessions and get left with a horrendous credit rating that can take years or even decades to fix. Poor credit doesn't just affect things like getting good deals on mortgages or credit cards - if your credit is really bad you won't even be able to set up things like mobile phone, internet or TV contracts. Not worth it.

I actually did have debt and Bitcoin at the same time back near the ATH

I'm sure many people do, and as long as the debt is low interest and you are on top of the payments, then that's fine. If you think the growth of bitcoin is going to outpace your debt interest, then it makes sense to have both at the same time. The issue is with high interest debts, especially if you are at risk of making late payments or even missing payments.

[Velkro]

I agree with Awesomus Maximus. If you are in debt, facing issues like loosing the roof over your head, or you are putting your family's life and health at risk there is no reason to hold on to your crypto in hope that its price will one day go up. You can always get more Bitcoin, but you might not be able to get your loved ones or your home back.

Agree also, there are situation in life that you can't measure with money/BTC.
Life of loved ones are always more important than any investment that you can do.
Priorities in life matters.

[CryptopreneurBrainboss]

Have you seen jet cash's personal messages on his profile? It reads

Debt is slavery - fight the banksters

therefore pay off your debt and hope for better future. there's is 50% chance of you been successful if you have achieved that before so you can always make your $100k back or even more.  Clear your debt and start afresh. The best feeling a man can feel is knowing you're debt free and owe the banisters nothing.