'I thought taking out a loan to invest in crypto was a good decision. Then I lost most of it'
Is taking out a loan to buy crypto wise? Almost a quarter of US investors seem to think so.
A recent survey by DebtHammer, which polled 1,500 investors across the US, found that 21 per cent of investors said they’ve used a loan to pay for their crypto investments.
These loans were often at exorbitant rates, with personal loans among the most popular choice. Of all the individuals who said they’d taken out a loan for cryptocurrency, 15 per cent said they used a personal loan.
According to the report, other methods of funding crypto investments came from payday loans, mortgage refinances, home equality loans, title loans and funds left over from student loans.
The survey also highlighted that around 10 per cent of people who used payday loans used it to purchase crypto: most borrowed between $500 (€503) to $1,000 (€1,007).
But why are so many turning to loans to fund investments in cryptocurrency in the first place and is it a sensible way to shore up your finances? Some have had success in doing so; others are not convinced it is the right decision.
A recent graduate from Leeds, England, who wished to remain anonymous, told Euronews Next that they used a payday loan to buy £600 (€712) worth of Bitcoin earlier this year.
"At the time I thought it was a good decision," they said. "But the price continued to fall – I lost a significant amount of my investment".
Data from DebtHammer shows that this isn’t an isolated issue.
Almost 19 per cent of respondents said they had struggled to pay back at least one bill due to their crypto investment, while 15 per cent noted that they were worried about eviction, foreclosure, or car repossession.
Others, however, argue that if loans are used sensibly, investing in crypto can be a viable option.
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