Bitcoin Investors Are Not Worried About Crash, Will Continue Using Borrowed Money to Trade
Bitcoin investors are not worried about a possible crash.
A study by personal loan research firm LendEDU showed that Bitcoin investors are not worried about a possible crash and will continue trading the digital currency using borrowed money.
In a global poll conducted amongst 672 active Bitcoin investors, researchers found that that 18.6 percent of the respondents used their credit cards to trade in Bitcoin, while another 18.60% used the ACH bank transfer process to fund and purchase.
But 22 percent of those who used borrowed money have not paid off their credit card debts after purchasing Bitcoin.
LendEDU issued a warning against such practice:
“The wisest and most frugal way to fund a virtual currency exchange account would be through an ACH transfer, which is completely free of charge. Only 18.60 percent of our 672 Bitcoin-invested respondents were paying for the cryptocurrency in this fashion.
Surprisingly, a majority of those surveyed believe investing in Bitcoin using a credit card is worth it despite the interest. At least 70.37 percent of credit card buyers believed owning Bitcoin offset the interest expense.
Additionally, 88.89 percent stated they had plans to pay off the credit card debt with proceeds from Bitcoin sales.
Invest Only What You Can Afford to Lose
The immensely popular Bitcoin lecturer, Andreas Antonopoulos has been teaching cryptocurrency investors the risk involved in the ever-growing blockchain technology. While trading in cryptocurrencies offered returns not seen in any Wall Street trade and involved lower risk, the risk for other cryptocurrencies being offered in the global market remains high.
Antonopoulos tweeted in June:
“I own a few different crypto assets as part of a small but diversified portfolio. I only risk as much as I'm willing to lose.”
During a Coinscrum event hosted by the Imperial College London, Antonopoulos explained the enormous risk, particularly to newbies and casual investors, to use borrowed money to invest in a particular asset, not just in cryptocurrencies.
He said it is very unwise to obtain debt to invest in a particular asset or asset class because of the risk it might crash.