How weird is it to borrow money and invest into Bitcoin?

[tvplus006]

Not weird actually but risky, imagine you borrowed money to invest in Bitcoin and of course when you borrow money there will be a collateral or probably a interest rate and if the Bitcoin's price crash you lose your investment and you have to pay the loan money and interest so it will really give you too much trouble if you are not careful.

Those who have mastered trading strategies and have been trading cryptocurrency for a long time should already have enough profit in order not to take a loan from a bank. Such an idea can only come to a beginner who does not understand that the market is volatile and borrowing money to buy cryptocurrency is comparable to a casino.

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[Emitdama]

Bitcoin price is increasing so fast such that some people wish they borrowed and bought bitcoin at 29k some weeks ago

I want to know if it's much risk to borrow and purchase bitcoin like it is to trade bitcoin. However, the market is pumping, and it may seem like a good move if the loan is not for lunch, rent, and family bills which account for our daily needs (That is, my daily needs have been taken care of). Thus, timing is another criterion to discuss. How can someone know the perfect time to pick such a desperate gamble? We win or lose in trading or holding bitcoin but, I presume with the help of experts in this forum who have gone through thick and thins in this market, good guides or rules can be shared for users and newbies in the forum to have a grip on the market and know if borrowing is appropriate. It does sound thoughtless but, borrowing is part of the business. And we must prepare for the best as well.

Sure, everyone goes through times like this when they start regretting that they didn’t invest at a particular price and then they start thinking that it would have been best that they borrowed money to invest and pay back.

Well, I will advise you that if you’re going to be doing such a thing, just have it in mind that things can change any moment, so you should make sure that you have other means of income that you can as well use to pay back the money you borrowed if things shouldn’t go as planned. Although I strongly believe the price will go up, but the main concern here is how long it’s going to take before it happens.

[zanezane]

Not weird at all, it's not common but it's not weird, you know what I'm trying to say? For me, it only gets weird if the payback for the loan is something other than a money or favor, maybe something peculiar like objects of interest for the lender. Also, don't try to go for a loan if you know that the interest or the payback is unfair to you and generally not worth it.

[Kong Hey Pakboy]

Not weird at all, it's not common but it's not weird, you know what I'm trying to say? For me, it only gets weird if the payback for the loan is something other than a money or favor, maybe something peculiar like objects of interest for the lender. Also, don't try to go for a loan if you know that the interest or the payback is unfair to you and generally not worth it.

Exactly, nothing weird with borrowing money to invest into bitcoin, isn't that how big companies do their investment too, they ask for a loan to complete the project and when the project is complete, then the borrowers will start to pay the lenders.

[conected]

Not weird actually but risky, imagine you borrowed money to invest in Bitcoin and of course when you borrow money there will be a collateral or probably a interest rate and if the Bitcoin's price crash you lose your investment and you have to pay the loan money and interest so it will really give you too much trouble if you are not careful.

- Indeed, almost always the lenders require a little collateral depending on the extent to which we borrow, they want to avoid the situation where we can hide and no longer refund them, of course, they are emergency saviors but also demons in the long run, they also need money to pay their rent and collaborators, nothing is free and talking about trouble can also be called small trouble as long as our work can still comfortably meet a few percent interest per month. But quite negatively is that mortgages only increase more and lose more assets, instead of paying on time

[tvplus006]

Exactly, nothing weird with borrowing money to invest into bitcoin, isn't that how big companies do their investment too, they ask for a loan to complete the project and when the project is complete, then the borrowers will start to pay the lenders.

In this case, the use of leverage provided by the cryptocurrency exchange will be identical to the loan provided by the bank. And we all know about the risks of margin trading, especially for beginners. Similarly, if a beginner who has no experience in trading takes out a loan from a bank, he will most likely not be able to repay it.

[Ruvi2000sew]

The timing can be perfected, especially if you wait for a bear market to occur, which is when you should be buying. Many of the investors have already figured it out, and I wish I had figured it out sooner. Perhaps we should wait for the next bear market and then borrow money from someone. However, it will take years for the price to rise again. As a result, be sure the person you owe the money to isn't in desperate need of it.

[ccFOUND]

Borrowing money and buying a speculative asset involves an insane amount of risk which could also turn your life into hell if things don't go as expected. Just imagine, what would have happened if BTC slipped just 10% after you bought your very first BTC at $29k through borrowed money check? You would panic and sell it low, then it goes high and you buy it again, this time with less USDT and you are left with less BTC now. You repeat this till you lose some significant part of your investment.

[batang_bitcoin]

Exactly, nothing weird with borrowing money to invest into bitcoin, isn't that how big companies do their investment too, they ask for a loan to complete the project and when the project is complete, then the borrowers will start to pay the lenders.

But to compare someone to a company, that's a weird type of comparison. Honestly, I'll say that it's weird to borrow for bitcoin, it's not an advisable thing to do. We all believe that someday bitcoin's price will increase but to pay off that loan of yours, whether it will be from a relative or a loaning firm, you shouldn't do that. And there's a huge difference from an operating company to an individual that borrowed money to invest in bitcoin, he'll never know when he can pay that in full through his profit from it. While a company, it has a projection on how they can be paid in full with their loans.

[Arriemoller]

I was recommended to post in this thread by aoluain as he visited the WO thread.
I answered that I don't wander outside of the WO because it's too full of stupid people, so me posting this here now is against my better judgement, but I'll do it anyway.

First some background information.

My text below was originally posted in the WO thread, WO is short for "Wall Observer BTC/USD - Bitcoin price movement tracking & discussion" in the Economy-Economics-Speculation board.
It's a very special thread, it's a self moderated, free speech thread where most things will pass, including racial slurs and bad language and what have you, without you being banned or deleted, if you don't like somebodys postings you use the "ignore" button or make a counter argument, you do not try to get the person blocked or deleted.
Your banners or other things you display for money are not visible in that thread, so you only get people who post because they have something to say rather than people who post to make money.

This is the thread where the famous hats originated, they are made by our hat maker xhomerx, this is also the thread where some of the oldest bitcoiners hang out, people who acquired their bitcoins in 2011 or earlier and are now buying a lake in Canada (Jimbotoronto) or a giant farm in Texas (Bob)  or trying to start his own seastead nation offshore (Elwar)
This is also the thread where you will find the latest news first, mixed with a lot of pleasant nonsense.
This is where the high IQ people post (and some others) and this is where we write haikus every sunday.

I myself bought the bulk of my bitcoins in 2013 at around 300 USD.

Why did I decide to buy right now?
Well, we all know that bitcoin moves in four year cycles that are governed by the four year halvings, we all also know that the last four/five months or so of these cycles are characterized by an insane up curve.
We entered this four year cycles insane last four/five months on the 20th of July, and I'm going to make a little experiment and use the bank to make some pocket money for myself without putting any of my own money into the experiment.


So here's my post from the WO.

"So, I bought some BTC today for the first time since 2014.

I decided to do a little experiment, I was offered a loan from a company (Qliro) and accepted, I borrowed 20 000:- (about 2300 USD), I set aside four months worth of payments on the loan (this will be used to pay of the loan for the coming four months) and bought btc for the rest (17500:- (about 2000 USD)) and I put those btc in a separate wallet.

Now I'm going to sell these btc in December when we go skyrocketing and the little experiment here is to see how much money I will make on this.
The plan is of course to repay the loan in full in December and do something fun with the profit.
I have been offered to up the loan with another 50 000:-, I might do that, still thinking about it.

So, as you can see the whole point is to make money without having to put in any of my own."

I have since accepted the offer of another 50 000 SEK, the money should hit my bank account on Monday.
I update regularly in the WO and might do it here as well, I am however not here to debate, I do that in the WO, where you are most welcome to join. https://bitcointalk.org/index.php?topic=178336.588120

On the topic of volatility. Btc is very volatile short term but very reliable long term. Anyone who buys and holds for four years will make a profit, short term however, it's impossible to foresee any bitcoin movement, and trying to play the short term volatility is pure stupidity. The exception to this is the very last part of the four year cycle that we have just entered.

To answer the question "is it weird to borrow..." No of course not.

Have a good Sunday and feel free to pop in to the WO and write a good Sunday haiku.
If it's a good, well written haiku you might even get some merits for it.

A haiku by the way, is a three line poem with five syllables in the first line, seven in the second and five in the third.
Like this.

Borrow money now
Buy bitcoin for that money
Enjoy the profit.

Edited a gazillion times.

[Dread Pirate Roberts]

Exactly, nothing weird with borrowing money to invest into bitcoin, isn't that how big companies do their investment too, they ask for a loan to complete the project and when the project is complete, then the borrowers will start to pay the lenders.

very different when talking about a pro trader that working for company, trader manager surely had more backup money which makes the trade last longer and makes the final profit.  not like someone who uses borrowed money from where else he covers when the main money is still in a minus position.

[slaman29]

Borrow money now
Buy bitcoin for that money
Enjoy the profit.

I have only recently seriously began to read WO even though in this forum a lot for years now. I like the vibe there but yes, it does feel a bit too experienced for the likes of me. In fact, I never really stopped feeling that way since I join, although slightly more confident in this year especially.

Borrow what you can,
Buy what will not make you cry,
Always safety first.

[ReiMomo]

I have an experience on it and would suggest not to go for borrowing and investing. What will happen when we borrow and invest? We will expect an income every month to pay back the money if we have promised the lender. Market is volatile. So at times, we may not get what we expected. We have to wait. So better do not go for borrowing. But if in case you are doing so, don't commit a near date to pay back. Invest in the best coin.

[molsewid]

Not weird actually but risky, imagine you borrowed money to invest in Bitcoin and of course when you borrow money there will be a collateral or probably a interest rate and if the Bitcoin's price crash you lose your investment and you have to pay the loan money and interest so it will really give you too much trouble if you are not careful.

Borrowing money to make an investment in bitcoin is not really advisable but possible. Not advisable because of the risks that a money doesn't have an assurance that you may gain a good profit out of it and could return the money you've borrowed on a specific time and possible because i'm sure that one of us here have tried it. There's nothing wrong with this idea to be honest but if there's any other way to start an investment than borrowing then it is better to make this idea on the last of your list. Still at the end of day we should learn to risk only the amount taht we are afford to lose.

[Zilon]

I would prefer you invest your personal money so you know the risk you are involving your self into we all know bitcoin is correcting the previous dip we experienced months back but understanding that crypto investment is all about risk will help you minimize the risk of getting trapped in your own debt. Stick to the amount you can afford by your self and invest with it the crypto so you don't seek ways on paying back when the plans fails out

[jaberwock]

If you do only rely with this kind of source on where you do depend on your crypto profit then its never been advisable that you do really need to take a loan for your crypto investment.

You wouldn't know on when you would make profit, what if you would lost instead? for sure it would really be a double problem since you would need to take those losses to break even and
would need to pay up some interest.

This is why I do never consider on taking up some loan unless if its really that appealing or tempting to dive in with the risk if you do really see some potential of profiting.

I have said this many times before, if your non-crypto income is good enough then you should take out a loan, it is always profitable for you in the long run. Remember fiat is something that loses value over time, so if I take out a loan that I have to pay 500 bucks a month for 10 years, in 2030 that 500 bucks will be nothing, it will be tiny compared to how much I make, and from today to until that day it will gradually become less and less valuable over long period of time.

But if I buy bitcoin with the loan, then in 10 years it will be HUGE amount, it will 10x if in 10 years and maybe more, of course this is just a guess but if you paid your debt with your salary, then what bitcoin did is unimportant, even if it stayed the same then you are not in much trouble. Long story short debt is not bad if you use it wisely and can pay for it, but if you do not have any money at all, and no income, then taking out a loan is insane.

[Lanatsa]

I would prefer you invest your personal money so you know the risk you are involving your self into we all know bitcoin is correcting the previous dip we experienced months back but understanding that crypto investment is all about risk will help you minimize the risk of getting trapped in your own debt. Stick to the amount you can afford by your self and invest with it the crypto so you don't seek ways on paying back when the plans fails out

Never been ideal on borrowing or taking up some loan for you to invest but there are instances which you do really seem to be worth and make out loan for that.

Its a matter of risk taking and not all people does have that kind of similar level and this is why we do see several outcomes basing up on the decision that they made.

We do have different perception on things neither those things we do get involved might be successful or not.So outcomes would really vary.

[Ryker1]

Exactly, nothing weird with borrowing money to invest into bitcoin, isn't that how big companies do their investment too, they ask for a loan to complete the project and when the project is complete, then the borrowers will start to pay the lenders.

very different when talking about a pro trader that working for company, trader manager surely had more backup money which makes the trade last longer and makes the final profit.  not like someone who uses borrowed money from where else he covers when the main money is still in a minus position.

Well, it is very obvious that borrowing money is not good at all just to use in trading. Because trading is a sort of gambling as we consider, there is no guarantee that there is a good return to it, it is always been risky to us. So the best thing to do is use the money that you can afford to lose and if you don't have capital in it, I don't think is risking other money to use and you are responsible for it is a good idea. I prefer not to continue and pursue my trading if I don't have spare money to spend on trading, --it made you to have a head ache when you got a problem.

[jossiel]

I have an experience on it and would suggest not to go for borrowing and investing. What will happen when we borrow and invest? We will expect an income every month to pay back the money if we have promised the lender. Market is volatile. So at times, we may not get what we expected. We have to wait. So better do not go for borrowing. But if in case you are doing so, don't commit a near date to pay back. Invest in the best coin.

That's right.

As you promise to the lender, you have no choice but to keep it up and follow what was in the contract. The pressure is on you and times might not be good for you if you wholly rely on the crypto profits.

For which sometimes are in losses and not that much in profit.

[sherenikaw]

in investing bitcoin of course we want profit and I think each person has their own perception of the capital they have. some use their own capital and others borrow money as it is said. if you can manage it well of course it won't be a problem, but if we are still in the learning stage then I recommend not borrowing money for the need to buy bitcoin. we don't know what the result will be whether we will get the profit or even lose. even so, that does not mean that bitcoin investment is detrimental, it all depends on how we handle our own assets.