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

[Becassine]

In any case, over the long term, since 2009, i.e. over 15 years, bitcoin has outperformed and been the best of all investments. In 2017 it was far from a stupid idea, especially when you have enough cash to pay it back no matter what (and a 1.5% loan!)

[tabas]

In any case, over the long term, since 2009, i.e. over 15 years, bitcoin has outperformed and been the best of all investments. In 2017 it was far from a stupid idea, especially when you have enough cash to pay it back no matter what (and a 1.5% loan!)

The strategy is only good for those who have extra cash that can cover them regardless of what happens to the market. While in actuality, it's been seen to be a profitable style for those who have been in many cycles. But doing this is not going to push me further, and I am afraid of taking a loan for BTC, despite that I am an enthusiast. Maybe, the conditions per bank are different, and if outrightly going to say the purpose of the loan is for BTC, they won't allow that to happen, and the loan won't be granted.

[KiaKia]

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.

There is nothing like Bitcoin I guess that's why it worked but people did what they felt was right, saving the man from possible troubles, it's true that it would have favoured him in many folds today but I wish this man can talk about this himself.

There are many things that happens in the life of a man while growing up and taking responsibilities, that debt idea to buy Bitcoin can land him in trouble as well, we never know, but it is possible.

What type of bank loan can someone take that will take many years to pay back? Maybe the year that he needs to pay back could be a bear market? Does this man even have an idea about Bitcoin chart? Like when to take profit? All this in the end have everything to do with him..

[Taskford]

In any case, over the long term, since 2009, i.e. over 15 years, bitcoin has outperformed and been the best of all investments. In 2017 it was far from a stupid idea, especially when you have enough cash to pay it back no matter what (and a 1.5% loan!)

This is actually what those skeptical people didn't see, since they are been tied up with mindset that its wrong to ask for loan to invest on BTC since what they think its volatile and risky. Usually those people thinking about that is those who usually trade then never been successful.

But if we look at in more greater scale on which the profit to get by using the borrowed  for long term investment is huge compare to the percentage we need to pay in the bank we can say that everything is really worth it. Its just we need to make sure that we have other source to cover up and pay the loan we take on time so that we will never get any problem on that matter.

[sana54210]

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.

Depends on the size of the loan, but you are right. I have taken loans all the time, and while none of that was to buy bitcoin, none of it was for making money reasons. Most of it was medical reasons and I did not made any money and then I worked and made some money and paid it back somehow, and I still have some loan and doing as well as I possibly could, that is what I am capable of doing at the moment.

So by same logic, if it wasn't for a medical reason, I could have gotten some loan, bought bitcoin with it, hold all my bitcoins and then pay the loan back just like how I paid right now with my salary. In that case, I would have made a lot more money but I would be afraid of doing something like that, even though I have already paid that much, if it was for bitcoin, then I understand being scared of it.

[Pi-network314159]

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.

There is nothing wrong in taken loan to invest in Bitcoin. Just like you said the most important thing is to check if the financial strength of the person is ok. If that is ok then there is no problem. Because most people  don't consider their financial strength or their source of income generation before taken loan. And when they take this loan and can't  pay back in ithe last  couple od days, then it will become problematic. If there is a steady means of income to back up the loan payment then there should be reason to take loan.

[justdimin]

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.

This is why people are saying, only do this if you can pay it back without selling bitcoin. So for example, if you end up saving 100 dollars per month on the side, that also means you can pay 100 dollars for a loan, correct? That also means, you can get 1000 dollars loan right now, and pay 100 dollars each for a year, with a return of 1200 dollars, with interest. Not everyone has the same interest rate all over the world, so this is just an example.

By the end of the year, you did not sell any of your 1000 dollars worth of bitcoin you bought, and it may become 2k or 3k, if you bought 100 dollars per month, it may not be that high. So if you are capable of paying your loan back, without selling any bitcoins, then loan could be a good idea. It could still be a bad idea too, depends on how the market moves.

[doomloop]

In any case, over the long term, since 2009, i.e. over 15 years, bitcoin has outperformed and been the best of all investments. In 2017 it was far from a stupid idea, especially when you have enough cash to pay it back no matter what (and a 1.5% loan!)

Okay, but who knew that? Did anyone know in 2009 that Bitcoin, a mere digital currency created by someone anonymous, would have a price above $100k one day? No, no one knew, so no one could think of taking a loan and buying Bitcoin with it, with the hope that they might become millionaires or billionaires within a decade or so. The same is the case for 2017, or even today. Do you know if Bitcoin is actually going to keep going up? What if it starts dropping tomorrow and keeps dropping until it reaches $5,000?

I understand that the price of Bitcoin depends on supply and demand, but logically, anything can happen to Bitcoin or any cryptocurrency, so I believe that borrowing money or taking loans only to make investments in cryptocurrencies is not a very bright idea because the profits aren't guaranteed even if we know Bitcoin has great potential, the future is always uncertain and unknown.

[l99l]

Borrowing to buy BTC and taking out a loan in fiat money is not an extraordinary thing in my opinion.
It can even be a good investment with the right timing, if you can easily pay your debt by dividing it into installments over months, it is not a bad option to be honest.
Generally, people say that investing with debt is not a clear rule, I think it is not exactly like that, sometimes you can take risks, when it comes to BTC, it seems to me to be less risky.

[Mahanton]

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.

This is why people are saying, only do this if you can pay it back without selling bitcoin. So for example, if you end up saving 100 dollars per month on the side, that also means you can pay 100 dollars for a loan, correct? That also means, you can get 1000 dollars loan right now, and pay 100 dollars each for a year, with a return of 1200 dollars, with interest. Not everyone has the same interest rate all over the world, so this is just an example.

By the end of the year, you did not sell any of your 1000 dollars worth of bitcoin you bought, and it may become 2k or 3k, if you bought 100 dollars per month, it may not be that high. So if you are capable of paying your loan back, without selling any bitcoins, then loan could be a good idea. It could still be a bad idea too, depends on how the market moves.

The advantageous thing about taking up a loan on which you can have that potential bulk purchase or buying up your coin and just like on what you had exampled that potential profits could be definitely much more bigger in comparing out on having that $100 buys per month in compared into that one purchase of $1000 on that particular time or moment. The only thing on here is that you should be that trying out to accept that price could be that also goes lower into your entry point on which there's the possibility that you might be having that negative after a year that you've been holding. So it will be that up to you whether you do have already accepted out the risks involved into it, or you would be that wanting to take up the risks since you do have that trust and positivity towards Bitcoin investment on which you do assume out that it will be pumping up even more at the time that you do finish up your loan. There's no guarantee about positive results and thats why this kind of decision will be that fitting out into those who are risks takers, but make it sure that you do take up such step on which you can be able to repay those loans without any issues because most of the time people do take up some loans but they cant be able to totally pay at the moment that due date is coming and this what results with that deep debt on which most people been experiencing or having such problem. It all matters about risks tolerance and proper planning because taking up some loans without having that proper planning on how you do be able to repay then it will imposing up that kind of negative condition due to having that none good plan executions.

[Questat]

Here in our country, if you apply for a bank loan and state the purpose of buying bitcoin, you will be disapprove immediately. First, bitcoin is not recognized by banks, and if ever it is, it’s more known illegally. But if you apply for a loan for a different purpose, like building up another business like food or groceries, and you have legal documents that would tell them that you’re able and capable enough to pay, no doubt they will immediately approve your loan.

See the difference. Just don’t use bitcoin as your purpose of taking a loan. It should be left a private matter.

[X-ray]

Here in our country, if you apply for a bank loan and state the purpose of buying bitcoin, you will be disapprove immediately. First, bitcoin is not recognized by banks, and if ever it is, it’s more known illegally. But if you apply for a loan for a different purpose, like building up another business like food or groceries, and you have legal documents that would tell them that you’re able and capable enough to pay, no doubt they will immediately approve your loan.

See the difference. Just don’t use bitcoin as your purpose of taking a loan. It should be left a private matter.

I'm sure everything has changed, the fact that there are many institutional player offering bitcoin loan means we've finally come to the point where people consider bitcoin as an actual investment although it has always been an actual investment that outperforms majority of asset since the emergence of bitcoin.

But at the very least I've seen some institutions offering a loan for bitcoin here and there these days.

[Stella Mese]

I'm sure everything has changed, the fact that there are many institutional player offering bitcoin loan means we've finally come to the point where people consider bitcoin as an actual investment although it has always been an actual investment that outperforms majority of asset since the emergence of bitcoin.

But at the very least I've seen some institutions offering a loan for bitcoin here and there these days.

Of course there will be many people interested in investing in bitcoin, so there are those who offer loans to be used in that direction, because bitcoin is very influential now and it creates a lot of hope for investment in it, I think they use that reason to attract interest in borrowing, and there is nothing wrong with trying because bitcoin is quite stable for now with its influence being quite large.

[Altryist]

Here in our country, if you apply for a bank loan and state the purpose of buying bitcoin, you will be disapprove immediately. First, bitcoin is not recognized by banks, and if ever it is, it’s more known illegally. But if you apply for a loan for a different purpose, like building up another business like food or groceries, and you have legal documents that would tell them that you’re able and capable enough to pay, no doubt they will immediately approve your loan.

See the difference. Just don’t use bitcoin as your purpose of taking a loan. It should be left a private matter.

I think that you can get a loan, and indicate the purpose simply as a formality, you don’t have to show a business plan or other documents for this. Just if you have an active business and you show it as proof, you can get a larger amount if necessary. And of course, no one will give you any loan to buy cryptocurrency, the bank knows how to calculate risks and it will always evaluate highly volatile assets as a loan with a high risk.

[tygeade]

only do this if you can pay it back without selling bitcoin. So for example, if you end up saving 100 dollars per month on the side, that also means you can pay 100 dollars for a loan, correct? That also means, you can get 1000 dollars loan right now, and pay 100 dollars each for a year, with a return of 1200 dollars, with interest. Not everyone has the same interest rate all over the world, so this is just an example.

By the end of the year, you did not sell any of your 1000 dollars worth of bitcoin you bought, and it may become 2k or 3k, if you bought 100 dollars per month, it may not be that high. So if you are capable of paying your loan back, without selling any bitcoins, then loan could be a good idea. It could still be a bad idea too, depends on how the market moves.

This is true, but also could work for other stuff other than bitcoin too, so that makes it questionable. You could take out a loan and do many things with that money, instead of just investing into bitcoin, so you have ask yourself, is bitcoin investment worth more than other ones? I am not entirely sure and can't say if I know the answer at all.

I could start a business too, a business could be started with just 100-200 dollars, you need a domain name and hosting, that's it, other parts could be done for free, I mean if you can of course, there are still people who pay for coders and designers when you can do a free version yourself, learning those two things are available online, so spend time instead of money and you save from capital.

[harapan]

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.

Honestly taking such risks seems like a decisions at an odd hour, there would be no results. Having a good records file can enable you take a loan but at that point it isn't a good idea, I know this is what most big companies do, they tend to give out loans to their debts free staff but alot times they find it hard to pay back and have themselves in debt. Though taking such loan to buy BTC is a good choice  but the aftermath should be considered as well.

[moneystery]

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

taking a loan just to invest is simply not recommended because the investment should be done using the money that he is ready to invest, not from a loan that has interest. also, taking a loan can have interest every month which can be a burden for him to pay for it. coupled with the unpredictable market situation, it only puts him at double risk - market risk and debt risk. in this case, he could be in a bad situation, and it could make him even more stressed, because in addition to facing asset volatility, he also has to face financial pressure to pay interest and principal.. and worse, it could make him sell his assets at a loss just to cover the debt payment.

[Becassine]

In any case, over the long term, since 2009, i.e. over 15 years, bitcoin has outperformed and been the best of all investments. In 2017 it was far from a stupid idea, especially when you have enough cash to pay it back no matter what (and a 1.5% loan!)

Okay, but who knew that? Did anyone know in 2009 that Bitcoin, a mere digital currency created by someone anonymous, would have a price above $100k one day? No, no one knew, so no one could think of taking a loan and buying Bitcoin with it, with the hope that they might become millionaires or billionaires within a decade or so. The same is the case for 2017, or even today. Do you know if Bitcoin is actually going to keep going up? What if it starts dropping tomorrow and keeps dropping until it reaches $5,000?

I understand that the price of Bitcoin depends on supply and demand, but logically, anything can happen to Bitcoin or any cryptocurrency, so I believe that borrowing money or taking loans only to make investments in cryptocurrencies is not a very bright idea because the profits aren't guaranteed even if we know Bitcoin has great potential, the future is always uncertain and unknown.

But when you invest, no one knows if it's a good investment, whatever the field. One thing is certain: without risk, there's no profit.
But ultimately a marriage is the same thing: you don't know if it's going to last a lifetime, but you take the risk.

People who are afraid of everything are missing out on life.

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

taking a loan just to invest is simply not recommended because the investment should be done using the money that he is ready to invest, not from a loan that has interest. also, taking a loan can have interest every month which can be a burden for him to pay for it. coupled with the unpredictable market situation, it only puts him at double risk - market risk and debt risk. in this case, he could be in a bad situation, and it could make him even more stressed, because in addition to facing asset volatility, he also has to face financial pressure to pay interest and principal.. and worse, it could make him sell his assets at a loss just to cover the debt payment.

But nonsense, borrowing in this way is called leverage. That's why people who invest in rental property prefer to borrow, even if they have the cash.

[_BlackStar]

-snip-

But when you invest, no one knows if it's a good investment, whatever the field. One thing is certain: without risk, there's no profit.
But ultimately a marriage is the same thing: you don't know if it's going to last a lifetime, but you take the risk.

People who are afraid of everything are missing out on life.

Bitcoin has proven to be a well-performing investment asset since it first started trading until now. At least people can learn what the benefits are of investing in bitcoin regardless of the time frame they agree on - but many of them have already acknowledged that bitcoin is a well-performing investment asset that provides worth it returns. Not many people doubt bitcoin - unless they are people who do not dare to take risks on assets with high volatility.

I have not found any investment asset that is without risk - I don't think it exists, even if it is like investing in land then I think there is also its own risk. Investments with a low level of risk are certainly in demand by those who do not like high volatility - their priority is the long term such as for retirement assets or something like that. However, high-risk investments such as bitcoin certainly also have many enthusiasts - especially from those who really dare to consider the risks and understand how to minimize them.

[Jewan420]

You are only focusing on being successful, but I am prioritizing both the possibilities of success and failure. If you are successful, it is certainly good, but even after being successful, it is unknown whether you will be successful in the battle of life or not. Or there is a big doubt about whether you will be happy in life even after being successful in investment, because money is not everything in life.

But if you fail in investment or face loss, your life will definitely not be happy. How will you repay that loan then? You can say that investing always involves taking risks, but taking a loan to invest in Bitcoin is the first level of risk. That is, it will be a high-risk investment and you are more likely to panic when the market falls. Even there is a high possibility of any kind of disaster. So I think, taking a loan and investing in Bitcoin will be the biggest mistake of life, although we think the future of Bitcoin is bright. Still, it is an uncertain market.