The world is hyped with the incredible gains of cryptocurrencies. Starting with Bitcoin, which is the flagship, but also extending the same logic to other altcoins like (Ethereum, Bitcoin Cash, and Litecoin), people are becoming more interested in these ways of making money.
Everybody is thinking about a substantial profit out of these new digital tools, and most are jumping on the opportunity without fully understanding the underlying technology, trading rules, and even basic technical analysis. Now it seems more important to get in the game at all costs and don’t miss out.
Should you take out a second mortgage?
A recent interview with Joseph Borg, securities regulator, uncovers a new trend in volatile investments, which goes against everything common sense and basic economics teach us. Taking a second mortgage to buy cryptocurrencies is beyond a bold move, it is borderline gambling.
Of course, we are not advocating against this opportunity, but as Borg suggested, making such a decision is not the wisest thing to do, especially for ordinary families with enough other obligations in credit cards, student loans for their children and a house mortgage.
Since not everyone has cash lying around, if you believe in your trading skills, it could be a good idea to take out just a small personal loan. Depending on your credit score, you can expect an APR between 7-29%, as highlighted by the top-rated upstart reviews. A few strategic moves could help you outbalance the interest in just a few trades, even if you come from a lower score than the average of 700.
Most successful traders earn so much that they repay their initial loan in a few weeks and then just use the “free money,” therefore incurring no additional risk.
There are probably many inspiring stories, but one that has caught the eye, critics and most likely envy of the online Bitcoin trading community was that of a man who took an equity loan of $325,000 to invest in cryptocurrency when the price was $1700. Now, after it has risen ten times, most likely he fulfilled his dream of getting a mansion. The only twist to this story is that the hero is terminally ill and took this chance with little to lose.
There are a lot of investors and financial analysts who have compared the Bitcoin bubble with the housing bubble of 2008. They have given several warnings regarding the dangers late investors are exposing themselves now.
One of the best opinions to consider is that of Peter Schiff, the man who predicted the 2008 meltdown on the housing market. He says that it was a great move for people who got in the cryptocurrency game years ago, but getting it at the current prices or even higher is a way to lose everything. Like in stock trading, he advises to buy on the rumor and sell on the news to make the most profit.
Take the plunge?
The cryptocurrency world is fascinating, and it’s a pity not to take part at least to understand the mechanisms. Start by investing a symbolic amount on one of the most popular platforms and learn about reading charts and the best trading moments. To avoid any drastic losses and bad investment decisions you can just take an unsecured loan, no more than you would have on a credit card.
Just start with an open mind, learn as much as you can and keep your emotions in check. The high volatility can be quite a rollercoaster for new investors who are accustomed neither to gains of +200% or losses of 30%, sometimes in 24 hours or less.