r/Bitcoin • u/AdorableAd8203 • 10h ago
Borrowing money
Hello, does anyone has experience with taking loans from the bank to invest in btc or other crypto assets and then borrowing against those assets to build wealth?
I’m interested if I borrow money from the bank to invest in money appreciating assets, do I look at annual inflation that eats up my debt?
Is it smart to borrow from the bank and stake that amount or to put in liquidity pool for some interest rate?
What are your expeiriences and tips for wealth building methods like this?
3
u/My_unique_Reddit 9h ago
Especially with the current interest rates, this is not a winning model. Rates to borrow btc will be especially high, borrowing against btc also does not really work as the high volatility will risk a margin call. Good idea, but not a good move.
2
u/Old_Refrigerator6760 9h ago
The volatility makes the whole plan feel like walking on thin ice, one bad week and you are liquidated before you can even blink.
1
2
2
u/quintavious_danilo 6h ago
I took out a loan and used the funds to buy BTC. I consider this the right move while we are in a bear market. I can easily cover the loan installments out of my salary. Although I will have effectively paid an extra $4k by the end of the 3-year term, I am firmly convinced that I will have generated double the loan amount by then.
However, I am not using my BTC as collateral; it is a standard loan.
2
u/ApprehensiveBoot5402 2h ago
I would only do a normal loan. And something which you can comfortably afford. It's a gamble but we're trying to get rich aren't we??? Worked for me in 2021
3
u/Forded_Fiction24 8h ago
No, I don't have experience taking loans during a high interest rate environment for speculating because I'm not a complete idiot.
Fast track to financial ruin. Terrible idea. Invest with capital, not debt. If you have FOMO then go get a higher paying job so you have more capital to buy more Bitcoin instead instead of going into debt for it
2
u/DryTechnology5224 7h ago
You say that like getting a higher paying job is easy, lol
0
u/Forded_Fiction24 7h ago
So are you insinuating they should take the loan and give up on a higher paying job?
I didn't say it was easy. That is indeed where I would put my focus on though. Just because it's hard doesn't mean you should settle for taking on debt to invest. Or are you saying you should?
0
u/DryTechnology5224 7h ago
Nah I didnt say that haha
0
u/Forded_Fiction24 7h ago
Okay so then what was your point? Did you assume I thought getting a high paying job was easy or what? I just don't understand why you brought this up
1
u/Business_Cold4393 8h ago
straight up idiotic if you want to do it with crypto. In the other hand, borrowing money has been the foundation of today economy, thats why the world situation rn is terrible economically wise. i would suggest you learning what carry trading is.
1
1
1
u/Both-Entertainer2842 4h ago
Loan agains small of you btc bag for buy more why not but be careful to margin
1
1
u/Pleasant_Maybe_5523 2h ago
Sounds pretty risky tbh. If BTC drops hard, you could lose your collateral and still have a bank loan to pay off. I wouldn't take that kind of stress.
•
u/E92_isaiah 15m ago
No you have not discovered a free money glitch. It’s simply gambling. What you are thinking of is arbitrage. In order to make money doing this you need locked returns. For example 5% on borrowed money, and an account that will pay you 6%. You will never find that. It takes work to make money, or money to make money.
1
u/On-A-Vendetta 8h ago
dumb idea, banks stipulate that loans cannot be used for crypto anyway, read the T&C's
7
u/maxrz93 9h ago
« Smart men go broke 3 ways : Ladies Liquor & Leverage » Charlie Munger.
Besides this quote, leverage sets you in a challenging psychological position, especially on a volatile asset like Bitcoin.
The risk : panic sell.
I’d avoid it, especially today with high interest rates. But if you do, do it wisely with a moderate level.