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

[Becassine]

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.

This person had everything he needed to get a loan and hod quietly bitcoin. He could indeed have lost his 50,000 euros if bitcoin had been bitconnect or Onecoin, but that's not the case. He didn't buy to trade. His monthly repayment would probably have been totally painless.

[Promocodeudo]

This is the only condition which I think makes it reasonable for someone to take a loan to buy BTC because then there is the confidence that you can spread the payment over a period of time, but aside that, any individual without a sure source of income that takes a big loan to buy bitcoins can never ignore the price when it begins to drop below unexpected levels. That kind of person will panic, and may cause themselves some health challenges like High blood pressure because of it.

In as much as I believe in Bitcoin I don't think there's any justification for anyone to borrow or approach a loan facility ro gat a loan for Bitcoin investment purposes my reason is Bitcoin not like other investment that profit are made from on a short period of time, we all know that Bitcoin is a long-term investment meaning that if you buy Bitcoin today or keep acumulating Bitcoin you shouldn't be expecting profit at a short while you must have to go through some processes which is hodling for a long-term, the only way I could support someone to take loan to invest in Bitcoin is if the person involved has other things or other repayment process aside the said investment he used the borrowed fund for but in  the case where there isn't a provision made from other source that can be used to repay this debt then I think accessing loan from any financial institutions aren't wise.

[viljy]

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.

Obviously, this is a huge risk. This can be illustrated by recent market events, when Trump announced tariffs, then there was a rumor about the alleged postponement, then a denial of this, then Trump himself announced the postponement of tariffs, and before that he wrote a post with the meaning "buy."
Imagine a person who bought bitcoin with borrowed money before the tariffs were announced. Maybe bitcoin will grow to its previous values by the time the loan is repaid, or maybe not. Then the consequences for the borrower will be dire.

[Cpt_reader]

Investing in Bitcoin is a long-term plan. Of course, you must have a source of repayment for taking a loan. If you have a job or business, then if you have the ability to repay the loan from that business, then you can buy Bitcoin with a loan. I am in favor of buying Bitcoin with a loan because there are futures in Bitcoin. If you take a loan of 5 lakh taka from a bank and buy Bitcoin. And if you have the ability to repay that money in monthly installments, then you can definitely buy it. But you have to keep in mind that you have to buy it right when the market goes down. You can buy dollars with a loan and be ready to buy Bitcoin. A few years ago, when Bitcoin was at 16k, if anyone who had the ability had bought it, he would have made a lot of profit today. And if you had kept 5 lakh taka in the bank at that time, would you have made the same amount of profit as Bitcoin? If Bitcoin can be bought now, I hope there will be such profit in the future.

[Becassine]

Obviously, this is a huge risk. This can be illustrated by recent market events, when Trump announced tariffs, then there was a rumor about the alleged postponement, then a denial of this, then Trump himself announced the postponement of tariffs, and before that he wrote a post with the meaning "buy."
Imagine a person who bought bitcoin with borrowed money before the tariffs were announced. Maybe bitcoin will grow to its previous values by the time the loan is repaid, or maybe not. Then the consequences for the borrower will be dire.

Please tell me what consequences ? If you hodl 5 years at least, please tell me what consequences ?

Either you believe in bitcoin or you don't and sell in panic. If you stay calm, there won't be any unfortunate consequences (if you've kept your seed safe, of course).

[kotajikikox]

Obviously, this is a huge risk. This can be illustrated by recent market events, when Trump announced tariffs, then there was a rumor about the alleged postponement, then a denial of this, then Trump himself announced the postponement of tariffs, and before that he wrote a post with the meaning "buy."
Imagine a person who bought bitcoin with borrowed money before the tariffs were announced. Maybe bitcoin will grow to its previous values by the time the loan is repaid, or maybe not. Then the consequences for the borrower will be dire.

Please tell me what consequences ? If you hodl 5 years at least, please tell me what consequences ?

The consequences will only be realized if the money is needed within the next few months or even years that you can't afford for bitcoin to go down. Though I will say if anyone bought bitcoin at around $90k then that seems like a foolish idea from the start. Yes bitcoin will continue to grow in the future but you still should try to buy at the cheapest price possible. But if you already bought bitcoin at that price, prepare to ignore everything and just focus on the future when bitcoin goes up enough for you to sell it.

[viljy]

Obviously, this is a huge risk. This can be illustrated by recent market events, when Trump announced tariffs, then there was a rumor about the alleged postponement, then a denial of this, then Trump himself announced the postponement of tariffs, and before that he wrote a post with the meaning "buy."
Imagine a person who bought bitcoin with borrowed money before the tariffs were announced. Maybe bitcoin will grow to its previous values by the time the loan is repaid, or maybe not. Then the consequences for the borrower will be dire.

Please tell me what consequences ? If you hodl 5 years at least, please tell me what consequences ?

Either you believe in bitcoin or you don't and sell in panic. If you stay calm, there won't be any unfortunate consequences (if you've kept your seed safe, of course).

So, let's say you took out a loan for 5 years at 30% per annum (this is the average rate). You have bought bitcoin and you will keep it for 5 years. How much money will you use to make monthly loan payments? Let's say you have money, then why did you take out a loan? I do not know which country you are from, maybe you have loans there at 3% per annum or 0.3% per annum, then of course you can take out a loan and buy bitcoin for 5 years. There is probably no need to explain the consequences of systematic delays in loan payments. In the best case, this will lead to a restructuring of the loan, in the worst case, it will end with the sale of debt to collectors, and the consequences there can be very dangerous to health.
Well, this is my subjective opinion about borrowing money to invest in bitcoin.

[Becassine]

The consequences will only be realized if the money is needed within the next few months or even years that you can't afford for bitcoin to go down. Though I will say if anyone bought bitcoin at around $90k then that seems like a foolish idea from the start. Yes bitcoin will continue to grow in the future but you still should try to buy at the cheapest price possible. But if you already bought bitcoin at that price, prepare to ignore everything and just focus on the future when bitcoin goes up enough for you to sell it.

So, let's say you took out a loan for 5 years at 30% per annum (this is the average rate). You have bought bitcoin and you will keep it for 5 years. How much money will you use to make monthly loan payments? Let's say you have money, then why did you take out a loan? I do not know which country you are from, maybe you have loans there at 3% per annum or 0.3% per annum, then of course you can take out a loan and buy bitcoin for 5 years. There is probably no need to explain the consequences of systematic delays in loan payments. In the best case, this will lead to a restructuring of the loan, in the worst case, it will end with the sale of debt to collectors, and the consequences there can be very dangerous to health.
Well, this is my subjective opinion about borrowing money to invest in bitcoin.

You have all the data on the loan and the rest in my first message, so there's no need to imagine scenarios just to say that it's hyper-dangerous and just to write a message. If he had borrowed 50,000 euros in 2017 over 5 years, he would have earned several hundred thousand euros after tax, and that's a fact.

[Marvell1]

So, let's say you took out a loan for 5 years at 30% per annum (this is the average rate). You have bought bitcoin and you will keep it for 5 years. How much money will you use to make monthly loan payments? Let's say you have money, then why did you take out a loan? I do not know which country you are from, maybe you have loans there at 3% per annum or 0.3% per annum, then of course you can take out a loan and buy bitcoin for 5 years. There is probably no need to explain the consequences of systematic delays in loan payments. In the best case, this will lead to a restructuring of the loan, in the worst case, it will end with the sale of debt to collectors, and the consequences there can be very dangerous to health.
Well, this is my subjective opinion about borrowing money to invest in bitcoin.

I have no problem with borrowing money to invest in bitcoin as it is almost like a form of business, but if the interest rates are too high then this idea needs to be reconsidered. 30%/year interest rate is too high and if we still insist on borrowing money to invest, it is not a wise idea. Bitcoin is a potential investment and holding for 5 years can be profitable but at the end of the day, what guarantees do we have? The world is becoming more and more unstable and anything bad can happen. What if the market cycle breaks, the bear season lasts for years and the bitcoin price keeps falling…? The consequences would be dire.

But if the interest rate is 0.3% to 3% per year and we have stable income or other backup assets...I support borrowing money to invest in bitcoin as well as business.


By the way, which country are you from, and is the 30% interest rate real or just an assumption because it is so high? How can banks attract people to borrow money with such crazy interest rates?

[viljy]

By the way, which country are you from, and is the 30% interest rate real or just an assumption because it is so high? How can banks attract people to borrow money with such crazy interest rates?

Alas, this is not an assumption, here is data from the largest (local) banking website https://www.banki.ru/products/credits/
There are statistics and a loan calculator here, and in the bar above the list of bank loans (in which you can see the maximum rate of 65% per annum), the average amount of the full loan value of 32.508% is indicated. If you do not want to open the link, then here is a screenshot



I looked at the data on loan rates in Europe. With such rates of 2.65% (eurozone), I would certainly take out a loan to invest in bitcoin. I would buy bitcoin with part of the amount, and from the other part I would service the loan payments for several years until the next bitcoin price increase.

[Solosanz]

You have all the data on the loan and the rest in my first message, so there's no need to imagine scenarios just to say that it's hyper-dangerous and just to write a message. If he had borrowed 50,000 euros in 2017 over 5 years, he would have earned several hundred thousand euros after tax, and that's a fact.

No one is stupid if they talk about the past, you only reviewing what happen in the previous year and say this or that. But, if you're the one who try to do that now, you're high likely scared because no one can know the future.

Yeah I do trust Bitcoin and know Bitcoin price will not disappoint us after holding for 4 years, but as always, we never know about the future.

My mindset, I would rather lost all of my wealth and start from zero instead of in debt and always getting pressure in the rest of my life.

[Synchronice]

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.

Wow, what an interesting thread (and thanks Google translate for translating that). While I wasn't on this forum in 2017, I think I can clearly explain why people weren't recommending him to do that. First of all, Bitcoin wasn't as popular and widespread in 2017 as it is today, it was still something new and risky and if we also keep in mind that old generation wasn't tech-friendly and new generation was just growing up (and most of them still didn't have good access to computer, internet and smartphones), also if we keep in mind that the mentality of people was a little different, then I think it's clear why people were against the idea of investing as much as 50K is in Bitcoins and I think that makes perfect sense.

To be honest, the strangest thing that I see in that thread is the fact that Banker gives him a loan to buy Bitcoins. Anyways, if his loan was backed with a very good asset(s), then bank doesn't care but if it wasn't, then that's strange.

[Oluwa-btc]

Debt for investment is not unusual. Just like with any loan, it needs to be well strategized. If you are confident enough to take a bank loan then it best not be after BTC has just rallied 100, 200, 300%+ and you are buying the top. There are points in time where this strategy would have worked, and the risk would have paid off...other times it would have been a disaster. It all depends on the loan terms, and when it's taken.

On another note, I have not heard of many banks allowing loans for the purpose of buying Bitcoin.

You're right it's not possible to take up a loan in the name of wanting to buy Bitcoin for reserve or keeps but then taking out a bank loan at the expense of something isn't a good startup which is why it isn't a great deal to take such bank loans cause majorly you may find yourself finding it hard to pay up even with the fact that you took the loan when it's profitable in the markets at a low rates.

[Botnake]

It could be possible if you have a connection inside the bank as they could create much more valid reason for your loan to get approved. But if you are just simply going to apply for a bank loan for the sake of buying bitcoin, they will only ignore your application and turn it down.

As long as the government and banks do not fully accept bitcoin, they will continue to turn down everything about bitcoin. That’s the saddest reality.

[STT]

His monthly repayment would probably have been totally painless.

The clue would be to take out some loan of an asset you have excess amounts of such as common paper or FIAT currency.   If you have that resource even in down times then it will probably work out.
   When people start doing smarty pants stuff like buying their house mortgage in YEN because it was going down for years then it can be a problem and so to for something like crypto.   I have no natural way of getting YEN every month so Im relying on the free market price which can spike due to the unique way Japan is arranged and balanced against gravity, it can reverse.  

I can buy shares in MSTR or Coinbase and this 'asset' will count as a deposit at about 80% value I think.  I need some certificate to say the same of BTC but its not that rare that Bitcoin can be held as a balance sheet asset, hence why its effected by the market sentiment and movement quite often.

[AmoreJaz]

It could be possible if you have a connection inside the bank as they could create much more valid reason for your loan to get approved. But if you are just simply going to apply for a bank loan for the sake of buying bitcoin, they will only ignore your application and turn it down.

As long as the government and banks do not fully accept bitcoin, they will continue to turn down everything about bitcoin. That’s the saddest reality.

In short, you can't request a bank loan using the reason that you want to invest in btc. Unless, you have some collaterals that you can present to the bank or much better to think of another personal reason why you want to take a loan such as home repair & improvement or payment of bills. But as much as possible, you should have some back-up plans when you opt to invest in btc. This is a digital asset and volatility is still the big factor why many people are interested on this market. Need to consider other tangible assets that can give you peace of mind while you sleep. Do remember, it is always best to have tangible assets as part of investments because it is like an assurance that you won't go broke or your investments won't disappear overnight.

[LogitechMouse]

It could be possible if you have a connection inside the bank as they could create much more valid reason for your loan to get approved. But if you are just simply going to apply for a bank loan for the sake of buying bitcoin, they will only ignore your application and turn it down.

As long as the government and banks do not fully accept bitcoin, they will continue to turn down everything about bitcoin. That’s the saddest reality.

Why in the hell will you say that you will use it to buy "BITCOIN"? I mean if your credit score is good, they will not ask for further question if you're trying to get a loan. You can just say, "I will use it to buy some Stocks." or "I will use it to renovate my home". I know that lying is bad in general but not saying that you will borrow to buy Bitcoin is better.

I mean it's a win-win for both you and the bank. They will earn by give you a loan through the interest, and at the same time, you will earn through capital appreciation (if you bought Bitcoin and it went up).

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.

You hold your own destiny. If you want to become successful, you will do everything to become one. Your decisions will make you successful or not. If you want to be a successful person, do everything that you need to do, and of course think smart as well.

It's pretty obvious that failing in an investment isn't happy at all that's why there's a think called "LEARNING" to mitigate or lower the chances of failure. Yes, there's a risk in getting a loan to buy Bitcoin I know that, but if you can repay that loan thru your monthly salary then what's the problem with it? You will not fail in investing into Bitcoin... or at least the risk is lower compared to buying altcoins. Borrowing to buy Bitcoin is a high-level risk ONLY if you can't repay that loan. There's no need to panic when the market falls because we know that it will recover at some point. You will only panic if you can't repay that loan.

We have different insights with this one and it's totally fine. Some might see it risky, and some (including me) see it as... let's say an opportunity. If you can't take the risk, don't take a loan. Simple as that.
I really do hope that we enter the bear market soon so I can take a loan already and start accumulating.

[YOSHIE]

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

The loan at their bank is required to pay monthly, if the loan only aims to buy Bitcoin for me it's not a good solution to consider.
The reason is simple.
Bitcoin can get off the notification, Bitcoin is no guarantee to profit in the month to cover the loan.
You can think of thinking of monthly money to be deposited while Bitcoin does not guarantee for bank borrowers for that.

Except: the borrower is a state apparatus, maybe it could be because they do not think of monthly deposits, directly deducted from salaries, maybe it's not a problem to borrow at a bank to buy long -term investment bitcoin.

[Fivestar4everMVP]

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.

You are right to be honest, I read this post now and I kind of regretted not taking this step from way back, but then on a second thought, I said to myself that I don't really have to regret since way back then, it was hard to tell what bitcoin could become.

So, in essence, we don't have to blame those who advised him against borrowing to invest in bitcoin, because nothing is more satisfying than knowing that you've made or gone into an investment and you don't have anyone come knocking on your door for their money when things get hard and you are unable to pay the money at the time you promised you would.
But then, those who have stable income can always borrow to invest in assets like bitcoin, atleast, for the fact that they believe they can clear the debt from their income if by the time they are supposed to pay back the money, the price of bitcoin hasnt appreciated enough to generate enough profit.

[Smack That Ace]

It could be possible if you have a connection inside the bank as they could create much more valid reason for your loan to get approved. But if you are just simply going to apply for a bank loan for the sake of buying bitcoin, they will only ignore your application and turn it down.

As long as the government and banks do not fully accept bitcoin, they will continue to turn down everything about bitcoin. That’s the saddest reality.

Even if you borrow money to do business, invest in real estate...banks do not easily lend you money. There are two types of bank loans, secured loans and unsecured loans. With secured loans, they don't care what you use the money for and they don't care if you repay the loan or not because if you don't repay it on time, they will seize your property. For unsecured loans, they will only lend you money if you can provide a steady income and usually the loan amount is not too high. They also don't care much whether you pay your debt or not because if you don't pay your debt, you will be blacklisted. That means you will almost certainly lose access to other services of the domestic banking system, not just that bank. This is a big problem that no one wants to get involved in.

In short, a bank is a business organization, so as long as you meet their requirements, you can borrow money. That's it. They don't care what you do with that loan.