Why it is sometimes possible to take out a bank loan to buy BTC

[LogitechMouse]

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BECAUSE THEY DON'T UNDERSTAND IT!!!!

I've already said in the past that borrowing money from banks or from whoever it is will be fine AS LONG AS you know when you're buying. When we enter the bear market season, I'm already planning to borrow to a bank and then I will just pay it using my salary. Why? Because I'm confident that I will make more money. Yes, there's the risk and all investment have risks. It all comes down to how high is our risk appetite, how we manage our risk, and how we can adjust just in case things will not go in the way we wanted.

I can't understand that thread that you shared OP, but I'm just a bit disappointed that most here are against what the user wants to do. I believe that he's capable of paying that loan, and he knows when to enter. Just look at those successful businessmen right now. They're borrowing money from banks because they believe that they can make more money by doing it.

Every investment has risk, but if you know how to manage your risk, it's okay to borrow from banks. I hope nobody will discourage those who want to borrow money from banks anymore.

[Fortify]

I remember this thread in 2017 in the French part.

https://bitcointalk.org/index.php?topic=2425439.0

At the time OP wanted to borrow to buy BTC. As we know today, he would have made a great deal (plus, a rare thing at the time, his banker was OK to lend him the money).

Yet almost everyone advised him against it. Why was that?

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

Nobody is able to tell which way bitcoin is going to head. It's commonly accepted that you shouldn't borrow money to invest in speculation, because it is almost like borrowing money to gamble. If the price had dropped by 50% instead he would be paying back a loan at 105%+ and would have half the money at the end of it.

[hyudien]

Bitcoin is risky so one should not invest in risky sector like Bitcoin with loan from bank. We know investing in Bitcoin requires long-term planning. Now if you take a loan from a bank you have to repay it within a certain period, but you may fail to repay the loan. However, I don't invest more money than I can afford to lose, I invest some money from my income, so why should I take a loan from a bank? You cannot guarantee 100% profit by investing in Bitcoin. So I think you should not invest by taking loan from bank.

If the person does not have a steady income then borrowing money from a bank will be dangerous, but if the borrower has a steady income then applies for a loan and invests it in bitcoin, it may not be so dangerous, why? because in my opinion the borrower will not have difficulty paying the debt plus interest so they are not too worried about their assets and if the price of bitcoin falls they only need to hold it for a long time until the desired price target is reached, I convey this with my assumption that the borrower wants to buy bitcoin directly without going through the DCA strategy or buying periodically, but if using the DCA strategy I also do not recommend borrowing from the bank.

[Futurexxx]

I remember this thread in 2017 in the French part.

https://bitcointalk.org/index.php?topic=2425439.0

At the time OP wanted to borrow to buy BTC. As we know today, he would have made a great deal (plus, a rare thing at the time, his banker was OK to lend him the money).

Yet almost everyone advised him against it. Why was that?

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

Nobody is able to tell which way bitcoin is going to head. It's commonly accepted that you shouldn't borrow money to invest in speculation, because it is almost like borrowing money to gamble. If the price had dropped by 50% instead he would be paying back a loan at 105%+ and would have half the money at the end of it.

Com'on man, thinking that Bitcoin investment is more of investing in speculation is very myopic in my honest opinion, Bitcoin is an asset that appreciate in value overtime, so their is a higher probability that in three to five circles from now Bitcoin can do up to 3x to 10x of it current price.
Then as for the loan aspect, you need to first kill that notion of paying back from the money invested into Bitcoin, it's advisable you only take loan to invest in Bitcoin if the loan is being payed installmentally, and if the loan interest is on the lower side, tell me why it's not a good deal, because you can easily pay back that loan from your paycheck once it comes either weekly or monthly, especially if the loan repayment is spread across a year or more.

[GeorgeJohn]

That's why it's good to follow your instincts instead of believing on other people, I know quite well that most people who follow their decisions on investment never regret, assuming he succeed by borrowing money that time and invest on Bitcoin and hold till date, don't you know that he would have become a billionaires in bitcoins by now, that's why it's good to follow your instincts instead of doing what you're not supposed to do.

[Lanatsa]

I remember this thread in 2017 in the French part.

https://bitcointalk.org/index.php?topic=2425439.0

At the time OP wanted to borrow to buy BTC. As we know today, he would have made a great deal (plus, a rare thing at the time, his banker was OK to lend him the money).

Yet almost everyone advised him against it. Why was that?

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

Nobody is able to tell which way bitcoin is going to head. It's commonly accepted that you shouldn't borrow money to invest in speculation, because it is almost like borrowing money to gamble. If the price had dropped by 50% instead he would be paying back a loan at 105%+ and would have half the money at the end of it.

Com'on man, thinking that Bitcoin investment is more of investing in speculation is very myopic in my honest opinion, Bitcoin is an asset that appreciate in value overtime, so their is a higher probability that in three to five circles from now Bitcoin can do up to 3x to 10x of it current price.
Then as for the loan aspect, you need to first kill that notion of paying back from the money invested into Bitcoin, it's advisable you only take loan to invest in Bitcoin if the loan is being payed installmentally, and if the loan interest is on the lower side, tell me why it's not a good deal, because you can easily pay back that loan from your paycheck once it comes either weekly or monthly, especially if the loan repayment is spread across a year or more.

Usually bank loans neither personal/business loans do have that amortization even on financing too and having that much less interest per month, but nothing beats up Banks into that since they do have that lowest interest in comparing into those financing companies out there. The only suicide on here is on the time that you do took loans or borrow into other people that offers 10% interest per month or even higher on which you do need up to repay the loan with the full CAPITAL + INTEREST then this is the time that you can be able to say that its never been worth on taking up such risks, but if we do speak about bank loans and you do have that capacity on repaying up those amortizations in monthly basis then i dont really see the issue. Everything do only just that depending or basing up on risks factor and considerations.

[bittraffic]

Is it still possible today?

Because I think banks would rather be keeping BTC by themselves than allowing anyone to buy BTC from the money they lent. Or maybe they will offer to lend BTC directly from the bank itself. Because as far as I know banks today are already gathering their own digital assets including Bitcoin.

What could the condition be if they are to approve lending Bitcoin?

[SmartCharpa]

I remember this thread in 2017 in the French part.

https://bitcointalk.org/index.php?topic=2425439.0

At the time OP wanted to borrow to buy BTC. As we know today, he would have made a great deal (plus, a rare thing at the time, his banker was OK to lend him the money).

Yet almost everyone advised him against it. Why was that?

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

In my opinion, It is not a bad idea to take a loan to invest in Bitcoin when a person's financial situation is stable, but it can be very risky when a person is still suffering to meet what they need. If he had taken the loan in the year he made that post, he would have gained a lot of profit more than x10 of the loan he wanted to take. Many people aren't only afraid that Bitcoin investing involves a lot of risks but they don't want the Op to get the loan and struggle to repay it.

However, a bank loan doesn't think of whether you do not have the money now or if you need an extension of the payment date, when it comes time to pay, you have no excuses but to repay what you owe them. Of course, that is what some individuals do before beginning their Bitcoin investment, many people take out loans to invest, but they make sure they are financially OK, you cannot invest with loan money and then sell at a loss if you are unable to repay the money.

[doomloop]

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

You are right; there is nothing wrong with taking a loan if you know that you have a stable source of income and that you can repay the loan without any problems even if the borrowed money that you've invested somewhere either gets lost or locked for a long period. The basic criterion and condition is that you should have a stable source of income, if you have it, you can go ahead and take a loan if you think that you can do something positive with the money and that the interest you are going to pay on the loan can be covered with the profits you are going to make.

A loan is bad if it's taken without any assurance of the repayment method. If you don't have a source of income, and you decide to take a loan so that you can invest the money into something and hopefully you can get good returns on it and then you will return the loan. What if the investment doesn't work out? That's the problem. You will be in trouble if that happens.

[Becassine]

Interesting conversation. In any case, our Frenchie unfortunately didn't give us any news.

If he had followed his idea of borrowing 50,000 euros in November 2017 over 5 years at a fixed rate of 1.5%, he would have made a nice net profit after tax.
 
It wasn't a question of borrowing to trade (well I suppose), but to hodle which is totally different. By leaving his btc in a wallet and repaying his loan without ever reselling it, he would have made a handsome profit.

An investment is a very personal matter, depending on many criteria, which is probably why there are asset managers or financial advisors (don't know how they are called in english).

(and if he had sold his btc at $100,000, that would have been totally cool)

[EluguHcman]

Businesses and investment opportunities are full of risks which is either results of loose or untimely prediction of when you can account prosperity on income flows.

Borrowing money to invest on Bitcoin could be good only when there is an friendly understanding between both parties.
But being strick, data-driven decision-making, it is highily risky to borrow money in a firm or individual that is inconsiderate if you are unable to meet up and returns as agreed especially when you are given conditional chances of short duration which we Bitcoin enthusiasts knows that long term investors are better chances to make it prosperously than short term goal investors.

Also note: The longer duration to return back to where you borrowed company or individual is the higher interest rate.

I see this borrowing of money to invest on Bitcoin when the investor also have some good source of income that can generate the funds to pay back the money if the Bitcoin market have not been favorable to the investor at the elapsed of the deal.

Why borrowing to invest on the stocks is because you can apply your own marketing strategy which could yield you quick profits unlike Bitcoin that you must hold on until the market entirely achieves an edge to price increase which is generally effective to all investors.

So borrowing to invest on Bitcoin is matter of understanding otherwise, the risk of loose is a zero (0) in as much you don't sell on panicked.

[cxtreenal]

That's why it's good to follow your instincts instead of believing on other people, I know quite well that most people who follow their decisions on investment never regret, assuming he succeed by borrowing money that time and invest on Bitcoin and hold till date, don't you know that he would have become a billionaires in bitcoins by now, that's why it's good to follow your instincts instead of doing what you're not supposed to do.

Fear is responsible for diverting our attention from the urge to invest in Bitcoin when our instincts are in control. You see, Bitcoin has crossed an impossible sea since its inception in 2009, and has crossed the highest ATH of $109k. Bitcoin is an inspiration and the highest effort for investment can make you more responsible in terms of financial stability. Being influenced by others and staying away from Bitcoin is equivalent to deceiving yourself, which is comparable to selling your instincts to others.

[Kelward]

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

If you take a loan to buy Bitcoin, what if it starts to dump when you want to repay the loan? Bitcoin is a volatile asset and there should be conditions attached before somebody should consider borrowing money to invest in it. Bitcoin is profitable if it's held on a long term therefore if you should take a loan for it, it should equally take a long term before you start to repay it. I don't think that it's a wise investment plan to take a loan to buy Bitcoin that you won't take a long term to repay, nobody knows exactly what price will be in the future.

For instance we experienced a dump that slumped to $74k when we're still in the bull run, many speculators didn't predict such a dip. Imagine that you've taken a short term loan to buy when price was $105k, and speculating that within a short timeframe that we'll see ATH at $150k. By now you'd be repaying the loan at a loss because there's no ROI on your Bitcoin investment. It's not advisable to take a loan to buy a volatile asset unless you want to take a risk by gambling with the loan fund.

[Muba20]

Every investment has risks, but not everyone can take that risk. You can invest in Bitcoin with a loan if you are aware of the risks. If you take a loan after considering the time and invest in Bitcoin, then there is a great possibility of profiting from the investment. But one of the major reasons for discouraging people from taking a loan is that after investing in Bitcoin, they must repay the loan. For those who have the ability to repay the loan, it is definitely logical to invest with a loan. When Bitcoin halving occurs every four years, there is a big spike in the price of Bitcoin. And it is very easy to profit at that time. It is natural for those who planned to take the risk of investing in Bitcoin in 2017 but now they regret it. One significant thing about Bitcoin is that the price of Bitcoin will continue to increase and we will definitely see many more people regretting this in the long run.

[Becassine]

If you take a loan to buy Bitcoin, what if it starts to dump when you want to repay the loan?

In this case, it doesn't matter at all. The person has a salary, has planned to repay with a low rate of 1.5% over 5 years, the banker has validated because the guy has the means whatever happens. So the btc can go up or down, it doesn't change a thing.

[Fortify]

I remember this thread in 2017 in the French part.

https://bitcointalk.org/index.php?topic=2425439.0

At the time OP wanted to borrow to buy BTC. As we know today, he would have made a great deal (plus, a rare thing at the time, his banker was OK to lend him the money).

Yet almost everyone advised him against it. Why was that?

It seems to me that all investments involve risk. What makes borrowing to invest in BTC any more risky than investing in a start-up, opening a business or buying a house (which may be full of defects, for example)? If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

Some people just need to learn to be happy with what they have - greed has caused the downfall of many people over time and overstretching by taking a loan which you will have to pay back regardless of whether the asset falls it just gambling. If you want to gamble, that's fine, you might as well go to a casino and keep putting money on the roulette table, picking random colors until you eventually bust. Nobody could predict the trajectory of bitcoin and it has been a bumpy ride. Looking back in hindsight is easy, you could look at the chart of most stocks and say the same thing - if you invested between point A and point B you'd be rich! Generally, banks don't want people to gamble with their money and you'd be committing fraud if you took money out for this purpose without telling them.

[red4slash]

At the time OP wanted to borrow to buy BTC. As we know today, he would have made a great deal (plus, a rare thing at the time, his banker was OK to lend him the money).

Because a move like this is a bold move and not everyone can accept such a thing including maybe me.
Actually it doesn't matter when we borrow money and use it as a purchase for investment in bitcoin because it doesn't violate.
But in this case of course we also realize that something like this is risky for people who are not in a good economic situation.

If we can diversify this with the income we have then indeed it doesn't matter especially if the investment is done in the long run, it's just that not everyone can do this especially when they don't have income because there is not a long-term goal being sought but they actually complicate themselves.

[Becassine]

Some people just need to learn to be happy with what they have - greed has caused the downfall of many people over time and overstretching by taking a loan which you will have to pay back regardless of whether the asset falls it just gambling. If you want to gamble, that's fine, you might as well go to a casino and keep putting money on the roulette table, picking random colors until you eventually bust. Nobody could predict the trajectory of bitcoin and it has been a bumpy ride. Looking back in hindsight is easy, you could look at the chart of most stocks and say the same thing - if you invested between point A and point B you'd be rich! Generally, banks don't want people to gamble with their money and you'd be committing fraud if you took money out for this purpose without telling them.

I don't know if you're answering just like that to write something or if you have an idea of the subject. The banker agreed, as it has been written many times before.

And if you think investing in bitcoin is a game all investments are a game. You can also borrow to set up your restaurant and go bankrupt, lose your money and stay with debts. You can also invest in real estate and your tenant stops paying (and in France the procedure to get the tenant out takes a minimum of two years) and then you're in deep shit.

We've written it several times: if the banker studied the project and said yes, it's because he knew he'd be repaid anyway.

You can be happy with what you have but you can also be ambitious and invest in what you believe in.

[Natalim]

We all know that investing with borrowed funds adds more risk to your investment, but if you have a stable job to pay or you have an established business that you can rely on, so why won’t take that risk? How can you maximize your investment during market entry when you don’t have sufficient amount of resources or funds in the first place?

It is an individual’s preference to take a loan or not at the start of investment. However, if you only rely on your bitcoin investment and wait for it to grow and produce profits, well that’s a very risky move, one should be discouraged from doing it.

[Distinctin]

If the person's financial situation is stable and the banker, after studying the file in depth, is OK, I don't see why you can't borrow money to buy BTC. In fact, this is what some large companies do.

I agree but a person with a stable financial situation shouldn't borrow to invest in an unstable asset because the risk involves means that they may now go into debt if the market crashes. But I know that there are people who like to take risk and are ready to deal with whatever comes.

You have a point there, but even those wealthy men in the society who are considered highly financially stable still take some bank loans so they can finance their investment, regardless if it’s high risky or not. So the point here, one can take a loan if there’s a guaranteed business or high paying job that will pay the monthly amortization. The bank will only disapprove your loan if you don’t meet their requirements for loan approval.