Do You Borrow Money To Invest In Crypto?
The crypto price goes up quickly. If you buy before rising the price, there is a chance to make a huge profit. It seems easy to see how much profit you would make if you buy at the right moment, but taking entry at the moment is not easy.
You may think that's the bottom of the market, so you buy crypto. The crypto price drops further which proves that you are wrong. You think if you catch the bottom of the market, and make more investments in crypto, that will change everything.
You try every possible way to accumulate capital to invest in crypto including taking loans from the bank and borrowing money from relatives and friends. But what if the crypto market does not rally and crashes suddenly?
Have you ever thought of how you would repay the loans and borrowed money? If you consider the risk, you will think twice to borrow money to invest in cryptocurrency. In case you lose your own money, you may not have pressure from the outside. When you borrow money, you will definitely get pressure from the lenders to pay their money back
A young Indian man attempted to commit suicide by jumping off a river bridge Vidyasagar Setu in Kolkata, India. Noticing this, a cab driver informed the police. The police reached there in time and stopped that young man from committing suicide.
You are wondering why a young man decides to commit suicide. He invested in crypto taking loans, borrowing money, and even taking his mother's pension fund. He lost almost $37,500 in crypto. Then he got pressure and threatening calls to pay back the money he borrowed. He could not handle the situation and decided to commit suicide.
Many people do terrible things after losing money in crypto. When you see the upside, you should also consider the downside. Taking loans for making investments in crypto can put you in a vulnerable position. The crypto market will do its thing, you need to do yours to protect your capital.
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I definitely wouldn't borrow money to invest in crypto because the chances of losing that money are very high. Crypto is a volatile investment and requires one to be cautious of the risk before investing. I understand where the man that wanted to commit suicide is coming from but it's not the end of the world, there are ways he could make that money back and pay back the loans he took rather than commiting suicide.
That man went through a terrible situation, but committing suicide is not a solution. The problem is when we only see the upside, and ignore the downside, we can make a huge mistake. The crypto market can change pretty quickly. Borrowing money to invest in crypto increases the risk that I don't think many people would like to take.
Yes, indeed. The downside isn't always clearly considered in the equation. Losing other people's money can feel ten times worse than losing your own money.
To tell you the truth I was thinking of taking a loan and buy crypto during the bull run just because I could do it and because of the hype. Luckily enough I didn't do it as the market soon after went down drastically and enter the bear market. Better invest what you can afford to lose as you don't know if it will provide positive gains or if it is a long or very long play.
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No one can tell exactly how the crypto market will react at a specific time. Borrowing money to invest in crypto is too risky. It was assumed that BTC would hit 100k in the last bull run that did not happen. I agree with you, it is better to invest that you can handle and afford to lose.
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I don't borrow to buy crypto because I don't think the leverage is worth the risk. Sure, you can earn more but the downsides of blowing up your account is too high and crypto is too volatile. The price swings are way to crazy.
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So true. People make some profit in a bull run but lose everything when the crypto market crashes. If you borrow money, you can lose way more that you may not handle.