Crypto crash: Over 60% of investors who borrowed money to buy Bitcoin are now sh**ing themselves

  1. The only assets I have are in crypto but I built them with DCA and have never over spent on my position. Been impatient to invest more but if everything went balls up I would be devastated but only emotionally not financially as I had no assets to begin with. I DCO profits out but reinvest them in btc dips

  2. That stats seems ridiculous. 70% of people are borrowing to fund their $100-$1000 Bitcoin investment?

  3. I used a credit card recently because the exchange had no fees on my card. Which I immediately paid off the same day. So not everyone using credit are actually using credit.

  4. As far as I know they are including Crypto bought with th credit cards, which for some countries is the only way to buy off certain exchanges so the statistic is a bit skewed.

  5. That 35% CC number is a bit disingenuous. I make all of my purchases for literally everything I can with CC for the cash back shit, it gets paid off immediately and is never truly "borrowing" in the sense implied by this study.

  6. My credit card won’t even pay for crypto and honestly, thank god for that because that’s the antithesis of “don’t invest what you can’t afford to lose.”

  7. I haven't got the balls to get a loan out for a crypto investment, thats too much of a risk for me with having a family to look after...

  8. For anyone reading, if you have family and you take on massive debt to buy crypto, you’re a massive asshole full stop. If you’re risking the health and financial stability of other people who depend on you, you need to genuinely stop right now. It doesn’t matter if the gamble pays off. Putting your family’s rent and food money and essentially putting it on black is an incredibly unwise decision regardless of the outcome and proof that you are unfit for a family.

  9. If you owe the bank $100, that's your problem. If you owe the bank $100 million, that's the bank's problem. -JP Getty

  10. People underestimate the ability of Bitcoin whales to “jump on the bedsprings” and liquidate leveraged assets back to the richest wallets from out of the entire crypto sector and beyond.

  11. My first thought was that it's absurd to think 35% of borrowers used credit cards to leverage crypto. Over 20% in annual growth is needed just to break even, and that's a lot to expect from even the crypto market.

  12. I was looking for this reply. I do the same with credit cards. Never have incurred interest or late fees or anything. And you can use a credit card, dca into crypto, earn money back or miles or whatever, and immediately pay it off. Win-win

  13. Exactly what the hell? You haven't lost your money if you don't sell and you already took a loan... you're just going to pay it every month till the profit exceeds the initial investment. Unless of course they expect quick gains and expect the price to rise forever.

  14. Doesn’t matter with just crypto these people would max out the credit card anyways, people get in over there heads on automobiles , house etc. Why would crypto be any different.

  15. Sadly, the average person believes that as long as you can afford the monthly payment then it's perfectly responsible to carry debt.

  16. Wow. What part of their brain said, yes, this is a great idea 🤦 Definitely not the type of people who should be investing in crypto.

  17. It worked out for you. And no doubt it will for others, but many are terrible at managing risk and money and would have pulled the money out trying to salvage what they can when things get tight and end up in a bad situation.

  18. Most Americans are absolutely buried in debt from the two largest scams in the country - higher education and health care.

  19. Also owning a vehicle is a must in most cities in the US. So car payments + insurance + gas on top of other bills

  20. 13% of people have student debt and 15% have medical debt. Assuming no one has both and they have zero overlap, that’s 28% of the country in the worst case.

  21. I took out a personal loan in May and sold my car. It worked out well thus far but I haven't paid the loan off yet because I'm greedy.

  22. One of my basic rules for investing in crypto is, that i wont borrow shit for investing. Invest what you can afford to lose!

  23. I’m guessing this just means most people are depositing with credit cards, not necessarily borrowing to finance their crypto. If there’s no fee difference for depositing via credit card or direct depositing from a checking/savings account, it would be wiser in most cases to fund your crypto deposits via credit card (for the sake of points/miles/cash back) and then just paying off the credit card before interest accrues.

  24. I imagine it's the people who don't save money. I know some 40-50+ year olds that have never invested in their entire life, and their savings is like $5000 max, their excess money goes to alcohol and cigarettes. it's very strange to me.

  25. If you took out a loan and made profit. You pull out what the cost of the loan is and pay it off. Leave in whats left and buy dips. Thats literally all you have to do. If you havent paid the loan off shame on you. All my coin is mine free and clear. No loans on my back.

  26. I mean they can take away everything you have because of the debt, but when you say you lost your wallet keys you lost your wallet keys :D

  27. Why ever leverage especially if you borrowed money. If you bought almost any major coin in top 100 in the last few months, you should be up

  28. I don't think people that leverage even use Reddit. And if they are... lurking waiting to downvote at even a mention... They clearly have gambling issues.

  29. I remember I think it was back in 2016 a bunch of people took out money against their mortgages to buy Bitcoin and then sold it for a staggering loss just a month or so later.

  30. Using a payday for anything is already a bad idea. Then you turn around and use it for crypto and that makes it king of dumb idea.

  31. Leverage is what kills bull runs. Institutions know retail investors are stupid. They just dump their coins to force liquidations then buy the dip.

  32. If people are taking out loans to buy BTC they can also easily sell a kidney to pay it back, high risk high reward.

  33. Yikes, a payday loan? Do you know that the fees are so ridiculously high, that your crypto would need to double every 2 weeks to stay profitable!

  34. Ha..ha... what kind (sniff)of loser would (sniff) use a loan to buy (choking up) ETH at $4700 ...(full on sobbing)...?

  35. All the Youtube gurus, Plan B, Bitcoin Maxi’s all told us BTC would be $98k in November. $135k in December. Some even said BTC would go to $400k in Q1 2020.

  36. Man.....whales have all that information at their disposal and they orchestrate a sell off, make profit and push out the little guys, They then proceed to rebuy and continue the vicious cycle of profit.

  37. I feel like the part about credit cards might be slightly misleading because as long as you pay the bill fully on time, it's better to pay with a credit card I would imagine as often you get 1% cash back or other rewards compared to a debit card

  38. This is the kind of shit that can cause crashes and even bear market. If the people which borrowed money will sell after another 20% dip to cut their losses, a bigger crash might follow.

  39. Do they just assume those people don't have the funds? I'm sure a lot of those credit cards were paid off right away. And it might be a good idea to but with a HELOC even if you could afford to pay cash.

  40. Overdraft? Really? Going into debt to buy crypto is a questionable investment, but overdraft sounds like a really bad choice

  41. Speaking from experience as someone who took out $40k in loans to buy on the way down during 2018, watched my holdings including loan money slowly and painfully decline 95%, capitulated at the bottom and lost what little holdings I had left by trying to leverage trade, then spent the next 2 years paying off a loan with nothing to show for it... yeah, it's not something I'd recommend.

  42. Damn borrowing money to invest is just a bad idea, I know sometimes I put more than I should in. But I don’t borrow money to do so. Maybe now I understand why alot of people flip out when the market dips.. because they are loosing money they never even had in the first place.

  43. I mean, just because you used a credit card to buy the crypto doesn’t mean you don’t have the money. It was probably more convenient to use a credit card on the app than linking a bank account.

  44. I find this....hard to believe... I've heard of people living off debt and relying on credit to get by, but to go into debt to buy crypto, especially with a credit card or payday loan?? That's just nuts, right?

  45. I freak out if I put $200 into a crypto that crashes afterwards, I can't imagine the feeling of these people who have taken on unsustainable debt to do so

  46. Alot of people dont realise that the trading fees/card interest on their $500 investment means they need 50% gain just to break even.

  47. If you do it properly and calculated I don't see a problem borrowing to invest. We're in a bull market, now would be the second best time to do it if you're trying to maximize gains during bull season. The first best time to borrow for max gains would be bottom of bear market if your rate is low enough like sub 10%. We will see diminishing returns eventually so squeeze what you can out of the current bull market. And not so much you couldn't pay it back if it all goes to hell.

  48. This makes me wonder if, as an online community, we should be doing more to encourage: DD, moderation, and diversification. I feel like this sub, and many other crypto communities have a YOLO mentality, the flip side to that being things like people losing their homes and families investing in, as of right now, is digital assets with little real world applications.

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