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

[STT]

To sell a weaker currency to buy a stronger one is common and called a funding currency.   Yen is the most widely acknowledged funding currency, the country has natural contraction not simply that but its been true a long time that people or traders will borrow Yen to buy other assets, its a cheap easy trade to do so.

   Bitcoin is confusingly both the stronger currency at times and fairly often a weaker currency,  Dollar too can be strong and also very weak from its constant inflation and over production of currency relative to GDP growth.
      Its hard to figure this out, it could take a life time but Dollar as a national currency is different to its usage globally as the main global reserve currency worldwide.  Overall Dollar has massive demand not just desired but a need to obtain Dollars in order to conduct international reliable trade with the world; when countries lose that dollar link they suffer greatly and its a gigantic benefit USA has in its own favor.
  I really don't buy the sob stories from whoever is in politics, to be the issuer of that widely used currency pays handsomely same as any deal where you can supply that which is in great demand you get given a good price.

[shinratensei_]

Taking a loan to buy bitcoin would be discouraged because a lot of people think they can take short-term, high interest loans, make money from their bitcoin investment, return the principal + interest and still benefit from the ROI of the investment, but who can predict the market? And how sure are you that everything will work out as you have planned it.

That said, if you are able to get a long-term loan with low interest, and you also have a job on the side, with savings that can at least repay the loan, you can try borrowing, bitcoin performs so well in the long term and if you are not so greedy, this strategy could work out for you.

Getting the best entry is one way to make big profit in bitcoin and sometime you just don't have the capital.
Imagine you were trying to invest in bitcoin few years ago when BTC was at $20k but have no money at hand, I think taking a loan make sense, the fact that 2 years later bitcoin is doing 500% means you're winning it big, basically you got free money just for buying bitcoin with a loan.

If i'm being honest, you're likely to lose your money getting a loan and using it for entrepreneurship like spinning up a startup .

[WatChe]

If you want to gamble with money, that's fine - you are welcome to spend any money that you have earned through hard (or easy) work. If you want to take out a bank loan though, you sign a contract which usually clearly defines what you will be doing with it, or at the very least will define certain things that you cannot do with it and near the top of the list is spending it on highly speculative assets. Just look at the mortgage market, banks are willing to give very high amounts over a very long term, because it is backed by an asset that is generally trending upwards with decades of history and evidence to back that up. Crypto on the other hand has only been around for less than a couple decades and had a serious market for about ten years. Maybe at some point in future it will stabilize to the same degree, but that's some way off.

To get loan from Bank one has to full-fill lots of formalities before his loan is approved. You can get loan from bank to buy a car or for mortgage but there are not many Banks around who are willing to give you loan for Bitcoin investment because Banks don't like Bitcoin. Having said that even if there is Bank willing to give you loan for investing in Bitcoin then don't go for that option. Investment in bitcoin is not doubt profitable but over longer duration and there are certain rules and regulation of Bank loans which a borrower has to follow like you have to pay the instalment on time. There are chances that you invest in Bitcoin and price goes down for long duration, then as a borrower you have to pay the instalments along with interest from your pocket.

[Despairo]

To get loan from Bank one has to full-fill lots of formalities before his loan is approved. You can get loan from bank to buy a car or for mortgage but there are not many Banks around who are willing to give you loan for Bitcoin investment because Banks don't like Bitcoin. Having said that even if there is Bank willing to give you loan for investing in Bitcoin then don't go for that option. Investment in bitcoin is not doubt profitable but over longer duration and there are certain rules and regulation of Bank loans which a borrower has to follow like you have to pay the instalment on time. There are chances that you invest in Bitcoin and price goes down for long duration, then as a borrower you have to pay the instalments along with interest from your pocket.

Many people take a loan for investment or business, most people treat Bitcoin as an investment, even banks hate Bitcoin, I don't think they won't give loan when you have valid collateral. Have you ever took a loan with a purpose to invest in Bitcoin?

The banks will reject your loan if you said the money will be used for gambling, as we know in the long run, the gambler will lose.

As long as your income enough to cover the installment and interest, even holding for long term won't be problem.

[retreat]

-snip-

That said, if you are able to get a long-term loan with low interest, and you also have a job on the side, with savings that can at least repay the loan, you can try borrowing, bitcoin performs so well in the long term and if you are not so greedy, this strategy could work out for you.

That's only if you can afford to get a long-term loan at a low interest rate.. but nowadays it's very difficult to get such a loan from banks or other financial institutions, usually they will charge sky-high interest rates and even then with collateral. But even if someone is lucky enough to get such a loan, yeah it's okay to take the loan to invest in Bitcoin, but with the considerations as you said, they need to have the savings and income to be responsible for the loan - and of course they need to invest in Bitcoin in the long term. Because if they think of borrowing at a standard interest rate to invest in Bitcoin in the short term, they will most likely lose a lot.

[Iranus]

 Having said that even if there is Bank willing to give you loan for investing in Bitcoin then don't go for that option. Investment in bitcoin is not doubt profitable but over longer duration and there are certain rules and regulation of Bank loans which a borrower has to follow like you have to pay the instalment on time. There are chances that you invest in Bitcoin and price goes down for long duration, then as a borrower you have to pay the instalments along with interest from your pocket.

You should not borrow money from the bank to invest in bitcoin if you do not have a job and a stable source of income, you are unemployed. But if you have income and can guarantee that you will be able to repay the loan regardless of the investment results, there is no reason to refuse the loan.

Borrow money to invest in bitcoin or business, everything has risks and if we can borrow money to do business, why can't we borrow to invest in bitcoin? as long as we have a clear, specific plan and have a backup plan even if the investment or business fails. We can borrow.

[bubilas]

Today I was lying down thinking about the topic of loans and cryptocurrencies, and in fact I do not agree with everyone who says that it is absolutely wrong to take a loan to buy cryptocurrencies, especially Bitcoin. I think that sometimes this decision is absolutely important and necessary for those who have a very small deposit.
The thing is that cryptocurrency periodically provides us with a great opportunity to buy it at a cheap price. I mean, when there is panic in the market and a panic sale occurs, as recently happened with Bitcoin, which reached 74,000, everyone was afraid and many sold cryptocurrency at that moment, fearing that it would fall lower. Although, in fact, it was a sale.

[Becassine]

In any case, when I see traders making trades with large leverage effects, it seems to me much riskier to bet on the bump and dump of the BTC than to borrow from the bank at an attractive rate and after all, whatever happens, we still have enough money to live and repay the bank.

To sell a weaker currency to buy a stronger one is common and called a funding currency.   Yen is the most widely acknowledged funding currency, the country has natural contraction not simply that but its been true a long time that people or traders will borrow Yen to buy other assets, its a cheap easy trade to do so.

Bitcoin is confusingly both the stronger currency at times and fairly often a weaker currency,  Dollar too can be strong and also very weak from its constant inflation and over production of currency relative to GDP growth.
      Its hard to figure this out, it could take a life time but Dollar as a national currency is different to its usage globally as the main global reserve currency worldwide.  Overall Dollar has massive demand not just desired but a need to obtain Dollars in order to conduct international reliable trade with the world; when countries lose that dollar link they suffer greatly and its a gigantic benefit USA has in its own favor.
  I really don't buy the sob stories from whoever is in politics, to be the issuer of that widely used currency pays handsomely same as any deal where you can supply that which is in great demand you get given a good price.

What does this have to do with the topic?

[mirakal]

Today I was lying down thinking about the topic of loans and cryptocurrencies, and in fact I do not agree with everyone who says that it is absolutely wrong to take a loan to buy cryptocurrencies, especially Bitcoin. I think that sometimes this decision is absolutely important and necessary for those who have a very small deposit.
The thing is that cryptocurrency periodically provides us with a great opportunity to buy it at a cheap price. I mean, when there is panic in the market and a panic sale occurs, as recently happened with Bitcoin, which reached 74,000, everyone was afraid and many sold cryptocurrency at that moment, fearing that it would fall lower. Although, in fact, it was a sale.

It will only be a wrong move if you take a loan to buy crypto, and those profits you are expecting to gain from crypto are the only sources that you depend on in paying your debt, so obviously the bank will not approve it, even those small company lending establishments.

Buying crypto isn’t wrong from a borrowed money, it’s wrong if you don’t have stable sources of income to pay for it.

[Joy- maker]

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.

absolutely there is nothing wrong with borrowing money from the bank to buy bitcoin provided you have a sources of income  to pay back the loan before the due day, and the motive of borrowing money to buy bitcoin  should be considered too, now less take for example you already have some portion of bitcoin in your wallet and bitcoin dip to $65k and you don't want to miss out on buying that dip, less say you don't have enough money on you as at  that time when the dip  occur in bitcoin, and you decide to borrow money from the bank to enable you buy that dip there's nothing wrong with it since you already have a source to pay back the loan, but borrowing money to buy bitcoin without having a source of income to pay, less say your only source of paying back the is through your bitcoin investment I don't support that one for that is a very wrong way to approach bitcoin.

[CryptoBuds]

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.

Yes, borrowing money to invest in Bitcoin is not a bad idea if someone has a stable financial situation and the bank agrees that loan. But I think will not be accurate when comparing investment in speculative assets with businesses, and thinking they have the same risk.

Business risks come from the market, management, strategies and finance...and if someone is smart and flexible, they can minimize business risks significantly. In other words, business risks can be controlled through plans and strategies. But investing in Bitcoin, risks such as price fluctuations, technology, and legality...are mainly out of our control. Therefore, in my opinion, investing in Bitcoin is more risky than businesses, but high risks may be highly profitable, so it will depend on each person's choice.

[DeathAngel]

Some banks don’t like their customers to use loans or credit cards to buy Bitcoin. My bank actually blocks credit card purchases of Bitcoin but allows you to do it with regular checking accounts. They say it’s to ‘protect their customers’ but we all know that’s nonsense. My advice is if you want to take a loan to buy Bitcoin, don’t tell them that’s what it’s for. Say it’s for a new kitchen or something as you will get less questions.

[AbuBhakar]

Some banks don’t like their customers to use loans or credit cards to buy Bitcoin. My bank actually blocks credit card purchases of Bitcoin but allows you to do it with regular checking accounts. They say it’s to ‘protect their customers’ but we all know that’s nonsense. My advice is if you want to take a loan to buy Bitcoin, don’t tell them that’s what it’s for. Say it’s for a new kitchen or something as you will get less questions.

The same way in our country. You must never tell the bank the reason why you're getting a loan is to buy bitcoin or cryptocurrency. I know some people took a loan to accumulate altcoins last year but they said never tell the bank you're buying crypto or else they will freeze your assets.

Applying for credit cards or opening a bank account is also difficult if your source of income is only from crypto. Banks still don't acknowledge the use of bitcoin. They still see it as a tool used to do fraud which is why they always flag if it's involved in a transaction.

[TastyChillySauce00]

Today I was lying down thinking about the topic of loans and cryptocurrencies, and in fact I do not agree with everyone who says that it is absolutely wrong to take a loan to buy cryptocurrencies, especially Bitcoin. I think that sometimes this decision is absolutely important and necessary for those who have a very small deposit.
The thing is that cryptocurrency periodically provides us with a great opportunity to buy it at a cheap price. I mean, when there is panic in the market and a panic sale occurs, as recently happened with Bitcoin, which reached 74,000, everyone was afraid and many sold cryptocurrency at that moment, fearing that it would fall lower. Although, in fact, it was a sale.

I always think that buying BTC with a loan money is completely fine but with proper risk management and planning. But for some reason so many people oppose the idea. In fact, I feel safer buying BTC with loan money knowing the market is liquid as heck unlike starting a business where you gotta pay the bills every month. But I can understand if people forbid it because most of people are just too reckless when investing using loan money but I find it as a good way to grow wealth.

[Oluwa-btc]

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.

Loaning money to buy BTC is a good choice depending if the price is at a drop that will make you be profitable when you invest it but on the contrary knowing that the price is not favourable and you tend to buy at that rate will be more frustrating cause the value will depreciate rapidly in respect to that and it'll be a great loss,so I believe it's in this regards he was persuaded to do so.yes such investment involves risks no doubts but you need to understand the right time to do so.

[Muba20]

If you want to gamble with money, that's fine - you are welcome to spend any money that you have earned through hard (or easy) work. If you want to take out a bank loan though, you sign a contract which usually clearly defines what you will be doing with it, or at the very least will define certain things that you cannot do with it and near the top of the list is spending it on highly speculative assets. Just look at the mortgage market, banks are willing to give very high amounts over a very long term, because it is backed by an asset that is generally trending upwards with decades of history and evidence to back that up. Crypto on the other hand has only been around for less than a couple decades and had a serious market for about ten years. Maybe at some point in future it will stabilize to the same degree, but that's some way off.

To get loan from Bank one has to full-fill lots of formalities before his loan is approved. You can get loan from bank to buy a car or for mortgage but there are not many Banks around who are willing to give you loan for Bitcoin investment because Banks don't like Bitcoin. Having said that even if there is Bank willing to give you loan for investing in Bitcoin then don't go for that option. Investment in bitcoin is not doubt profitable but over longer duration and there are certain rules and regulation of Bank loans which a borrower has to follow like you have to pay the instalment on time. There are chances that you invest in Bitcoin and price goes down for long duration, then as a borrower you have to pay the instalments along with interest from your pocket.

In countries where Bitcoin is not legal, banks will never provide loans for investing in Bitcoin. If a person takes a loan by showing other purpose, he must think carefully before investing whether he will be able to repay the amount he is borrowing. If he has the ability to repay the loan regularly through his other income opportunity, then a loan can be taken for him. And when investing in Bitcoin, an investor must invest with a long-term plan. In the case of Bitcoin, there is no way to say when the price will increase or decrease. For investment, you must invest with a long-term plan, otherwise the possibility of loss will increase.

[paxmao]

You do not really need to take a bank load to buy bitcoin in most jurisdictions. If you go to an exchange - preferably a reputable one - they will always allow a degree of marging trading that may be sometimes double or even potentially triple you existing funds. Needless to say that it comes at a certain risk, so we are all aware what happens when you get the move wrong.

One may think that with a bank everything is ok is you pay the credit. It is NOT, you need to keep the value of the collateral as much as you would in your broker and in fact the ability of the bank to collect may extend to other stuff you own... house, car...

[Roseline492]

Loaning money to buy BTC is a good choice depending if the price is at a drop that will make you be profitable when you invest it but on the contrary knowing that the price is not favourable and you tend to buy at that rate will be more frustrating cause the value will depreciate rapidly in respect to that and it'll be a great loss,so I believe it's in this regards he was persuaded to do so.yes such investment involves risks no doubts but you need to understand the right time to do so.

How would the person no is a favourable time? And also how they will no it will favour them before the time it should be because every loaning giving to someone has a date to pay back and when the time to payback comes you must fulfill the Agreement, so actually is good when it seems favourable but to achieve it is always the concern. About price dropping is very difficult to no if Bitcoin is because everytime we see it positively except is obvious of being too clear that no matter what is dropping, so if someone only plan was to snap in and get something from Bitcoin with loaning money is the worst plan.

[qwertyup23]

<..snip..>

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.

Well, you are somehow correct with the points you have raised.

However, loaning money primarily for investment is definitely a risky move given that you double the risk on your side. Not only do you have to pay your loan when it matures but you are also relying on the fact that your investment must have profited by the time your loan is already due and demandable.

What you mentioned back in 2017 was completely valid given the risks involved. But this falls into the category of "high risk, high reward" where a person can either experience both extremes (win or a loss).

In conclusion, I still advise persons to NOT loan money primarily to invest into another investment especially if they do not have a source of income that can cover such debt. The reason is simple- why loan when you can purchase it with your savings?

[Kelward]

Despite the level that Bitcoin has attained as a store of value and you're sure of getting ROI on the long term, it's not advisable to buy it with a short term loan. If you want to take a short term loan to buy Bitcoin make sure that you have made provisions on how to repay the dept from another source of income. Nobody can accurately predict Bitcoin price because it is a volatile asset, and it might not yeild profit to repay the loan when the time is due. Loans to buy Bitcoin that you intend to repay from it's profit will be well suited if the plan is for more than 4 years, from your ROI you can repay because it will surely hit ATH. For peace of mind I think that it is better to grow your bag through DCA method.