Topic: (discussion) as a newbie should you or should you not loan to invest in BTC. (Read 250 times)

This is still very risky. What if it went downhill?

I'd not take any loan for investing in any assets. I'd probably pump my own money which I save for months to do this. As trading is never guaranteed to goes the way you expect it to be, taking a loan is a no-no.

Your question.

And you have answered it.

Actually you also know that bitcoin is a very volatile asset and you also know that loan some money to invest in bitcoin is a high risk thing to get a loss. So the questions and steps that you submit to the community dont seem to be good enough and dont need to be considered.

Your idea will only trouble those who do it, because investing with money from a loan will only increase the risk of the borrower feeling overwhelmed by repaying the loan due to falling price. This will also increase bad loan. And if newbie want to do it, then know that no one want to lend money to newbie in the forum and that will only be considered an act of scam.

IIRC, someone shared his sad story that he took a loan in 2019(eoy) and invested in on bitcoin. And the timing wasn't perfect because it was the all-time high moments and that's a very bad decision for that guy.

He got in at the wrong time because he was just brought himself without any plans for execution. And he thought, like everyone did, that bitcoin by that time will continue to increase but as we know, we were aware of what came next. He bought bitcoin through loans, so he's in loss and then has an outstanding loan. I hope that guy and others who are experiencing the same are recovering little by little.

Getting loan to invest in bitcoin is a very wrong idea, you will put yourself in a very bad situation because the money is not yours, if the money is yours and you lose it then it's even better, you will find your way back up again but that's not the case if the money is loan

Investing and trading are both risk-taking, if you are going to loan money just to trade and invest then it wouldn't be good for you, once you had lost the money from trading and investing you would have a problem on how are you going to return the money, but it's up to you if you really believe on your self you can do it, some other people or businessman did loans before they become successful, it's a matter of said confidence, skills and knowledge if you really want to be successful on someday you should do risk-taking, well that is life, we won't improve if we don't experience those things.
Well said, it's better to spend your own money in trading and investing, as what we all know, there are always advice when doing both things, trade/invest the money you can afford to lose.

It's not good to loan bitcoin if you are going to invest or to trade it, both things are not safe money because you are taking a risk when doing so, you will not be sure that you can return the money you loan when you do trading because you can also lose your money when doing it. Especially if you are the only beginner, having lack of knowledge and skills about those things will result of losing your money. Better to trade and invest your own money so if you get lost you wouldn't suffer from thinking on how are you going to return it.

I have zero doubt that that could work. But still a no for me. Regardless how "safe" an investment is.

Sure, we could see a dip on a certain asset. But what if it continues dropping a lot more after buying the asset with loaned money? And also, if you're somewhat going to time the market by buying dips, then it really defeats the purpose of doing DCA.

Lastly, let's not forget that black swan events happen, that could easily easily potentially mess up a person's financial situation by taking loans for investing.

If you have a stable job and if you can afford to pay the monthly emi of your loan then you should borrow money and invest in cryptocurrencies like Bitcoin and wait for it to moon.

I know and every one here also know that Bitcoin will moon, what we do not know is when it will?

The question here is whether you can afford to take a loan and wait till Bitcoin reaches a new all time high. It is always advised to invest money which you can afford to invest and take the risk.

The higher the risk, the higher is the return. So if you are willing to take that risk you should go for it.

some questions have obvious answers, there is not much to discuss there. the answer is simply a big no.

but we could discuss whether an experienced person should do it, someone who has been around for at least a while so that they know the basics such as how to create a wallet, what a cold storage is,... so that they don't lose all their bitcoin to someone simple and stupid such as a clipboard hijacker!
although that is still not something that I would do but i can see it working if certain things were kept in mind. for example if the person was a risk taker by nature not someone who has never taken any risks in their lives and were trying to take the first and biggest risks of all times.
second condition is that they should still have some sort of safety net. for example the loan should not be something that would bankrupt them if they had to default or come up with another payment plan.
and finally it is about the market conditions. generally bitcoin is always going up. but there are times when it enters a big bubble (like $20k in 2017 or $1.2k in 2013,...) buying near the end of that bubble or during the aftermath is going to result in unavoidable losses for a considerable amount of time until the recovery starts which could take a year as we have seen in the past. but during any other time it could be very profitable.

You are 100 right, however, a one size fits all answer may not be the option.

Like for example, many people recommend newbies to DAC  (dollar average Cost) their BTC purchases.

I like this solution as it allows people to buy consistently, with money coming from your main income surplus into crypto.

So, if they had a budget of $100 usd a week, it would take them 52 weeks to buy $5.2k worth of coins with "surplus" money that they are cool to part with.

But what if, they see a great opportunity (a dump below $8k, before a massive rally and new ATH) and want to sink-in the remaining of their yearly $5.2k fiat ?
Maybe, a quick loan for $3k is a solution to buy the dip, and then they use the $100 allocated money to reimburse the loan.
Potentially making a better ROI than the $100 weekly buy of crypto.

So, taking a loan to buy crypto: no
Adapting ones buying strategy when an opportunity arises (without sinking more funds than the yearly allocation) : yes, if the risk-reward if favorable.

Loaning money to invest in a speculative and volatile assets is a bad idea in general. Yes, I'm bullish on bitcoin just as everyone else here is, but let's be honest: bitcoin isn't guaranteed to go up in the future, even in the long term. Borrowing money and putting it on bitcoin could put you into deep deep shit if bitcoin for some unforeseen reason drops in price in the mid-long term.

HIGHLY NOT RECOMMENDED

It's wrong to just rely on price volatility for these newbies or even a normal trader to be able to pay back someday. Much better if they take loans and used it on something that they will get at least a sure profit within a short period. Might be starting a small business.

Then after getting profits and able to save some, pay back the loan slowly and use the extra money to buy BTC. It will take time but at least not as risky as getting a loan without an assurance that they can pay back on time. Instead of getting profits out of taking a loan to buy BTC, the worst might happen instead.

This is not about being newbie or professional.
Trading as an activity is something similar to gambling. There is no productivity, neither garantees about earning. I would suggest everybody not to put his savings in something similar. For someone who plan to take a loan to use it for trade, all i can say that it's so risky and dangerous for him and for the borrower too.

I don't think so, they should also be aware for their actions especially  when money is involve.
There are lot of people already tried to loan just to buy Bitcoin, some of them won and some of them lost. So, in short risk is still there.
But I totally agree to not loan just to buy Bitcoin. We should also think the collateral if there is any or interest in our loan, if there is any bad happen, we should always have plan B.

Not the best time to actually post this, newboes might actually think Bitcoin is a good buy right now when in fact asking for a loan just to enter the market right now will be a very risky move for any newbie. Like you have said in your OP “Bitcoin is on the rise” when in fact it already has risen in a significant amount already and buying at this point will just make the newbies don't have any margin of safety on their portfolio. A good rule of thumb is if it already had made a lot of noise and it its price went up considerably you know its too late to join. It's better to wait right now to see if tou'll have a better opportunity.

Take a loan and invest it somewhere - it's not wise decision in general, not only when talk about investment in crypto. Investments into gold or buying share also wouldn't be smartest decision. What you're going to do if investment will fail? Take another loan to repay older one. Probably only things like buying real estated with borrowed money doesn't looks stupid.
Golden rule - you should invest your own money only, and not more than you afford to lose. It applies to all investors, not newbies only.

Newbie in trading or newbie in crypto trading? Maybe, you have said about newbie in trading. No I don't think it’s a wise idea to taking loan for investing in crypto trading as a newbie or as pro.

Newbie has not much knowledge. So there is a big chance to lose the investing  money. So It's better to invest own money at the first stage of trading life. Otherwise it will create extra pressure mentally when they will lose and can not pay back the loan. Also lost the interest in trading at the same time.

The longer bitcoin goes sideways the more volatile its next move will be is something i'd say at least..

Every asset class is volatile, if you have enough trust in where you think it's going - why not leverage instead? Both are as risky but at least with one you're not going to end up brankrupt (unless you're really bad at managing funds - which by this point I think everyone who talks to other traders has seen)...

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I think everyone's heard of the person who remortgaged their house in 2017 and bought bitcoin at the $17k mark...

Investing or trading in cryptocurrencies using loans is a very bad idea that anyone should never think of. Due to the highly volatile nature of cryptocurrency prices, If things go South, you are fucked and the lender will come knocking at your doors or even sell off your valuable collateral.

Besides, the interest rate you will be asked to pay up alongside the amount you owe the lender is still going to have a bad effect on your earnings in case you make some profits.

   "Bitcoin is on the rise" "the future is all about Bitcoin" this and more Can be the Apple that caught your interest -its true, but still the future is on the blind spot of men-  as an investor profit signifies success, but how far a can you go to go for that investment you see profit in?

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One of the basic techniques and everyone can agree with me is "invest what you can forfeit/loss.  Can loan be the answer?

    Is Investing in Bitcoin with a loan usually have time to pay up, so this is you not working with your own time but the time you are to pay up, there can be a drop so bad it becomes a loss and you have to pay up.
   Before taking that loan have you rationalized
+ the time you have
+ Worst possible outcome as to Best possible outcome
+ Your mental balance - you on you toes knowing it's a loan-
+ Is the profit equivalent to risk

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Invest in Bitcoin with capital you can call your own, -dont be mis guarded if anyone makes you understand that Bitcoin is a ladder that only goes up-. You can learn skill/services you can give out in exchange for Bitcoin. demote taking a loan to the lowest part of your list of options.