Borrowing money to buy Crypto a bad idea?

Better to learn and invest than be sorry later

0

Recently, cryptocurrencies have entered the world of hot investment and it surely seems that the craze over it only keeps on growing. Each day, there is one or another story about how people are investing in cryptocurrencies and making a lot of money. As if they are becoming rich with just a click of the finger. Stories like these make one think that if they should do the same. With all the hype that cryptocurrencies are getting, one could easily be tempted to invest in them and to such an extent that they potentially even borrow money for it.

But if one is borrowing money to invest in cryptocurrencies, it might in actuality not be a great idea. It is a general thumb rule that one should not borrow money to invest in something (let alone cryptocurrencies for that sake.) Well, borrowing money generally puts one in a lot of debt and they cannot be even sure that the investment would pay them off well. Causing a loop of anxiety, misery and that has never really been profitable to anyone. There is no guarantee that the investment is going to bring them profit, making the payment a financial burden. 

This stands true for borrowing for any type of investment and the risks are only a tad bit magnified when we enter the world of cryptos. When borrowing money to invest in cryptocurrencies, the risks are much more dangerous than one might presume. There are huge swings in the digital currency market. The prices can go up and down in a drastic manner which is extremely difficult to predict. If one is borrowing money to invest in cryptocurrency, there is a chance of repaying the money but there is also a huge chance of losing money. Making the cryptocurrency market extremely volatile and a huge gamble. Cryptocurrencies have price rises because of celebrity tweets and social media hype. And once the hype is gone there is a fall in surges. So if the price rises with a meme, it can as easily go down, making the risk of losing borrowed money, far greater than one could apprehend. There is a lack of regulation in the crypto market, the federal government is still trying to figure out effective ways to govern the market and to make rules and regulations that might be beneficial. Until anything is final, the market is at risk of scammers and no concrete regulations to help one if they get scammed. 

The world of crypto is still very new and one needs to research and understand more without blindly following trends if they do not want to fall into the pits of financial debt. It is better to invest with their own money rather than borrowing it if they really want to invest and enter the realm of cryptocurrency. It is really better to be safe than sorry, especially when cryptocurrencies are still being explored. One can hope that with much clearer regulations and understanding it would be easier for everyone to enter and invest in cryptocurrency in the future.

You might also like
Leave A Reply

Your email address will not be published.