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

[palle11]

Isn't borrowing for investment in Bitcoin essentially betting on price will go up from the current point and hope to cover the loan + interest.

It is highly risky with trading and being hopeful that you can repay loan from profit isn't a guarantee. You can lose the loan amount in a short while in trade. Stay away from loan if you want to trade.

Also, I don't know who will give suck loan without other collateral.

Don't even to put in a collateral, whether your house, car, land or whatever because you may not recover it.
Don't also stand as a guarantor for such loan .

[LastKiss]

There is no point in borrowing money to invest in a value asset that performs your investment regardless of whether you make a profit or not.  It is better to get up and invest your money without borrowing. Never act in such a way that you lose everything. Before you do any work, think carefully and if you invest, do what you have. Never borrow and invest.

Yea, it's a really bad plan when it comes to borrowing money and using it for trading, gambling, or even investment. But there's one of my friends who borrow money and traded with it, in the end, he get some profit and return the amounts he borrowed, if a case like that happened it's not a problem but the problem one when people who don't understand anything to investment or trading the borrowed money without any good education. We should guide our friends when he doesn't know anything rather than he forced to use borrowed money.

[rby]

It is not very weird and yet it is weird. It all depends on the time of borrowing. If you observe very very well you will know that most people enter the market at the wrong time. When bitcoin moving fast everyone will rush and buy and many many people will end up buying the high and when bitcoin crashes they will cry..
If you borrow money to buy bitcoin when bitcoin was 10k dollars you didn't make mistakes. If you buy this present time at 36k you did not make mistake but me I cannot say how long bitcoin market will still be profitable

[Hamphser]

It is not very weird and yet it is weird. It all depends on the time of borrowing. If you observe very very well you will know that most people enter the market at the wrong time. When bitcoin moving fast everyone will rush and buy and many many people will end up buying the high and when bitcoin crashes they will cry..
If you borrow money to buy bitcoin when bitcoin was 10k dollars you didn't make mistakes. If you buy this present time at 36k you did not make mistake but me I cannot say how long bitcoin market will still be profitable

Knowing about the right time is actually been always a challenge due to unpredictability of this market thats why you couldnt really able to have precise predictions or actions towards market price.

If you are considering on taking up some loan then be wise on doing so since you wouldnt really know on what would happen next but if you do have some other source of income which could
able to patch up those loans without relying on your crypto investment then its considerable but if you are relying on it then it wouldnt really be a good idea to do so.

[Jating]

Tried it like 2x already, but I would say that it has it's perks specially if you have invested it prior to the bull run. But I don't like the risk though, so I return the money right now and get my profits and then reinvest. so I'm debt free and then my money is growing (although we are in a bear market right). But for those who are willing to take the risk, then why not? It's up to you on how you are going to play the game. If you know the risk and can still make money then by all means, no one can stop you from doing it.

[BitcoinIsABubble]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

[Zilon]

Taking a loan to trade Bitcoin I will kick against that but if it's on the basis of holding then it is only worthy of the risk if the loan is on a long term basis. Bitcoin is only profitable on a long term. It's not a short term investment option so if the loan comes with a long term payment plan then investing and holding is best option

[JayJuanGee]

Debt is not a bad thing, not inheritly. There are bad debts and there good debts and you need to figure out which one you are on the side of. If you take out a mortgage to buy a house, pay about 1.5k monthly on the mortgage and make 3k on the rent, while the price rises %1 above inflation a year, that is a good debt to have. If you take out a loan, or just use a credit card to buy the new iphone, that is a bad debt.

That's actually a great explanation. The concept of good and bad debts is actually refreshing to read and understand. It makes sense to have debts if you know that the overall value is going to be positive from those debts. It's similar to a businessman taking loans from bank at let's say 10% and easily making 20-50% profits from the same money, then that's good debt.

That said, it's not easy to actually identify whether your plans and calculations are going to be viable because there are hundreds of other aspects we won't account for when making the calculations.

Of course financial basics is to attempt to assess whether you are engaging in debt in order to make an investment versus engaging in consumption... some ways of spending money have opportunities to get a return, and for sure consumption by definition either depreciates in value or is completely consumed around the time of purchase.

Even within the category of investments there is going to be levels of uncertainties regarding how sure is the bet (how likely is it that you are going to get anticipated levels of return including the consideration regarding how much it is going to cost you to take on the debt).

The mere fact that the bet (investment) is risky or uncertain should not completely rule out whether to attempt to earn extra value in that direction - and like OP said, the rich use debt all the time to magnify their wealth - yet also, merely because the rich do it (and may well be successful) should also not be the ONLY consideration regarding whether to get into the debt because the loan terms may well be different between people and other individual circumstances are surely different between people too.

Don't get me wrong.  On a personal level I consider myself to be a pretty conservative investor; however, I find it a bit annoying to find so many members posting in this thread and blanketedly asserting that other members should not use debt blah blah blah... and assuming that the mere fact that there is additional risk should warrant not to employ the use of debt.

I am actually a proponent of learning and practicing and figuring out your individual situation first before employing debt, so in that regard, even starting by investing small amounts and attempting to learn how to do it before investing larger amounts and before employing more sophisticated tools, such as debt.. are all better practices than getting greedy or risking a lot of capital (whether using debt or not) before you have gotten some good grasps on various other more basic aspects of learning about both your own personal finances and your own psychology, too.

[Captain Corporate]

That's actually a great explanation. The concept of good and bad debts is actually refreshing to read and understand. It makes sense to have debts if you know that the overall value is going to be positive from those debts. It's similar to a businessman taking loans from bank at let's say 10% and easily making 20-50% profits from the same money, then that's good debt.

That said, it's not easy to actually identify whether your plans and calculations are going to be viable because there are hundreds of other aspects we won't account for when making the calculations.

 That is why people do not take out those loans that easily, because there is no guarantee in life that you could make a profit from that debt. I mean if it was just that simple, lets assume that you take out a 20k loan, pay maybe like 1k per month for 24 months (thats quite high interest in most places) and then you just buy GPU's with it, and start mining. If you can find those GPU's at a sale price, and have low electricity, you should be making profit and that loan should be nothing to you. But we all know that it is not that simple, your GPU could get broken, your house can caught on fire, ETH could publish 2.0 out of nowhere and a million other things.

 This works on any idea, you could take a loan out for your factory that makes a lot of money, and want to make more money and use that to buy more machines to produce more and earn more, then you could end up living through a pandemic and fail to pay your loan back because your business just went bankrupt basically. You could buy a house, and make a lot of profit from that with that mortgage paid by the person who pays the rent, but then housing market could crash. All in all it is very difficult to predict what will happen.

 However, "debt is bad" should not be the way out, bad debt is bad, good debt could be good or it could turn bad in a case of emergency like I mentioned, but at least you tried something with it, and can't say I never tried.

[ScamViruS]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

If he borrows and invests in a bitcoin and the market is a little dumped for a while, how will he repay his loan? We know the potential of Bitcoin which is a market dump but we don't have much tension. But when someone invests that money by borrowing money and the market suddenly dumps that investor will be under a lot of pressure to repay the loan. So in the case of this type of investment, it is necessary to make money which will not be a big loss even if it is lost.

[lienfaye]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

If he borrows and invests in a bitcoin and the market is a little dumped for a while, how will he repay his loan? We know the potential of Bitcoin which is a market dump but we don't have much tension. But when someone invests that money by borrowing money and the market suddenly dumps that investor will be under a lot of pressure to repay the loan. So in the case of this type of investment, it is necessary to make money which will not be a big loss even if it is lost.

It will really bring a lot of pressure to borrower if what he expected for his investment didnt happened. There's no guarantee to gain and there's no timeframe when you can already take profit since it depends how the market move. As we know it really takes a lot of patience in order to be a gainer in crypto because its not a smooth investment. Hence its not recommended to take a loan to invest especially if you're not certain with the result. Save money as capital to invest is often wise because whatever happens incase you invest it, no one will pressure you because you dont owe money to anyone.

[JayJuanGee]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

If he borrows and invests in a bitcoin and the market is a little dumped for a while, how will he repay his loan?

From my perspective, it is financially imprudent (meaning you should not do it) to take out a loan that you are not able to repay absent the performance of your investment (in this case bitcoin).  So part of the gamble is that if matters go to shit, you are still able to pay your loan with other proceeds... and that is the cost of your gamble not paying off.

The cost of your gamble paying off is that you end up having more money than you would have otherwise because your investment performed better than the cost of your loan.

The people who lose in these matters are those who are not prepared for either scenario.. and if you are only prepared for UPpity.. then you are inadequately prepared and gambling rather than investing.

We know the potential of Bitcoin which is a market dump but we don't have much tension. But when someone invests that money by borrowing money and the market suddenly dumps that investor will be under a lot of pressure to repay the loan. So in the case of this type of investment, it is necessary to make money which will not be a big loss even if it is lost.

You are investing more than you can afford to lose, if you have not already thought ahead about the cost of the loan and your ability to pay it back - either way the BTC price goes.  Not a good idea, as you are suggesting, but as you are not suggesting, the mere taking of a loan does not indicate that you are investing more than you can afford to lose, unless you are not financially (and psychologically) prepared to pay for the loan in the event that your investment does not pay off.

[milewilda]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

If he borrows and invests in a bitcoin and the market is a little dumped for a while, how will he repay his loan? We know the potential of Bitcoin which is a market dump but we don't have much tension. But when someone invests that money by borrowing money and the market suddenly dumps that investor will be under a lot of pressure to repay the loan. So in the case of this type of investment, it is necessary to make money which will not be a big loss even if it is lost.

It will really bring a lot of pressure to borrower if what he expected for his investment didnt happened. There's no guarantee to gain and there's no timeframe when you can already take profit since it depends how the market move. As we know it really takes a lot of patience in order to be a gainer in crypto because its not a smooth investment. Hence its not recommended to take a loan to invest especially if you're not certain with the result. Save money as capital to invest is often wise because whatever happens incase you invest it, no one will pressure you because you dont owe money to anyone.

Most of the time on which people do really expect into the returns of their investment without even minding the due date or interest that they are really paying off out of those loans or borrowed money.
It is really just too risky because you dont know on what would happen in the market whether you could make out some profits or not and thats why its better to have some other back up source of
income which you could pay out those loans or borrowed money without any problems as long you are responsible on repaying those in time then i dont see any problems or anything wrong
on borrowing up as long you are responsible and wont impose out some problems.

[Mauser]

For me it feels wierd to trade with borrowed money. I am not an expert in trading, so the risk of losing money in a trade is there and I can't imagine how I would feel if that money I lost wasn't even mine. For a very successful traders it can make sense to trade with borrowed money, because they leverage their returns like that. Similar to how the hedge funds operate, take a cheap loan and multiply your profits. The problem is that the risk of the trade multiplys also. Taking out loans means we need to repay the interest and if we didn't make a return for a while we could be forced to close out our position and be screwed. When trading only with our own equity we have more freedom, in times of falling prices we could just sit out the dip and wait for prices to recover. Interest rates are still cheap at the moment, what makes loans seem cheap right now. But interest rates have to rise to fight the higher inflation, which will make refinancing more expensive in the future. The only way were I could consider trade with borrowed money was if it is from family or very close friends. I would share all profits with them and make sure that they understand before there is a risk they could lose some of the money.

[newdevices]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

If he borrows and invests in a bitcoin and the market is a little dumped for a while, how will he repay his loan? We know the potential of Bitcoin which is a market dump but we don't have much tension. But when someone invests that money by borrowing money and the market suddenly dumps that investor will be under a lot of pressure to repay the loan. So in the case of this type of investment, it is necessary to make money which will not be a big loss even if it is lost.

Investing in crypto is not something easy and the risks are also big so consider again before borrowing money to invest,
use cold money and I think it's the most appropriate thing,
the crypto market is really difficult to predict if we are not careful anytime we can lose money

[Zanab247]

Taking a loan to trade Bitcoin I will kick against that but if it's on the basis of holding then it is only worthy of the risk if the loan is on a long term basis. Bitcoin is only profitable on a long term. It's not a short term investment option so if the loan comes with a long term payment plan then investing and holding is best option

Taking a loan to trade bitcoin is like adding fuel to fire which is not encourage for users  to embark on such decision in the community. Bitcoin price is unpredictable which will be difficult for people to use loan to make a good profit because the price can pump today and dump tomorrow which will not allow the short term investors to pay back the loan on time.
If the loan agreement is for 3 or 4 years, investing on long term will really help you to achieve something good from the loan when the price of bitcoin increase higher before the date of the agreement.

[Hamphser]

Borrowing money from the bank to invest in crypto is essentially betting on which asset would appreciate more, a currency which suffers from inflation and has unlimited supply or an asset with storing value + utility. So yes, it would be weird not to do it.

If he borrows and invests in a bitcoin and the market is a little dumped for a while, how will he repay his loan? We know the potential of Bitcoin which is a market dump but we don't have much tension. But when someone invests that money by borrowing money and the market suddenly dumps that investor will be under a lot of pressure to repay the loan. So in the case of this type of investment, it is necessary to make money which will not be a big loss even if it is lost.

Investing in crypto is not something easy and the risks are also big so consider again before borrowing money to invest,
use cold money and I think it's the most appropriate thing,
the crypto market is really difficult to predict if we are not careful anytime we can lose money

Invest on what you can afford to lose and dont ever consider on taking up some loan just to invest on crypto because it would not really give out any assurances or guarantees that you could make out money

of those investment and if you do mainly rely on it then you would really be putting yourself into trouble thats why on the time that you do make out investment then it would be good that you would really be

spending or investing the money which is just an extra or savings of yours but of course dont go all in with this one and only invest on what you can afford to lose.

[qwertyup23]

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.

Thanks, I'm ready to learn.

I think it is the same concept where you borrow money and gamble it away from online/physical casinos- there is no absolute guarantee of profiting on your end.

It is up to you to decide which risks outweigh your decision. If you think that by borrowing money and investing you would be able to yield some profit, then feel free to do so. But remember that once you borrow money, you are under the obligation to return it on the agreed specified period. In the event that the period has already been elapsed and your borrowed money still has not yet matured, then you would just suffer the consequences and embrace the loss on it.

[MinMan]

Borrowing money to invest is very risky. The price of Bitcoin is volatile and difficult to predict. When market prices change, it is easy to be affected by market sentiment and make wrong decisions that lead to losses.
Without familiarity with crypto knowledge and trading strategies, it is difficult to guarantee a consistent profit in the crypto market.

No doubt it's risky, very obvious in fact. But if you have a plan on how you are going to be carrying out the process, then I think it's not that foolish or risky to actually borrow some money and invest/trade with BTC.

Considering you know which way the market will move, sometimes you can make a hefty amount of money if you have a big capital to trade with. But, yeah if you don't have experience or never did it before, then it's a dumb idea to invest or trade by taking loans because then you will have the interest creeping up every passing day and you may lose the capital as well.

[Ludmilla_rose1995]

IMO there is nothing wrong with borrowing money to buy bitcoins what is wrong is that you borrow money from a bank to buy a car, vacation or buy jewelry. I'm sure there are many traders/investors who are successful or make big profits from borrowing money from banks to buy Bitcoin.