While I'm writing this article, the price of Bitcoin in Coinbase exceeds 14,400 euros, a figure much higher than the 817 euros that was worth at the beginning of 2017. This fever has caused this virtual currency to become more mainstream, and many people have decided Invest in this asset in recent weeks.
Blinded by these figures, some people have come to ask for mortgages or credit cards to buy Bitcoins. This is what Joseph Borg (president of the North American Association of Securities Administrators) has just said in an interview with CNBC.
The cryptocurrencies are here to stay.
Borg says they have seen people "asking for mortgages, using credit cards and lines of credit" to spend that money on Bitcoins. In addition, he has taken the opportunity to leave a message to those who are thinking of going in this direction:
"A person who makes $ 100,000 a year, has a mortgage and two children at the University should not invest in this."
Anyway, he says that "cryptocurrencies are here to stay". Borg wonders if Bitcoin will survive, but he's sure Blockchain will. It declares that this virtual currency is in the "mania" phase, and believes that its value will probably fall to balance its supply and demand.
A very dangerous cocktail
It is normal for many people to think about investing in Bitcoin right now, as it is one of the most revalued assets in 2017, experiencing a rise of 1,800%.
Its extreme volatility is something that can be seen in a positive and negative way, and it is currently unknown what will happen in the coming months. This combination of factors reminds us that we must be very cautious when investing in it.
If we ask for a loan, buy Bitcoin at a certain price and then drop sharply, we would be facing a serious problem, since we would have no way to deal with the debt we have contracted with the bank.
As we have heard many times in recent months, the smartest thing to do would be to invest a quantity of money that "you can afford to lose" and that you do not need in the medium / long term. This concept is very difficult to ask for a credit card or a mortgage.
People should be allowed to make their own mistakes but in these cases I think people should be protected against themselves. If you take a loan to buy in at an all time high, you apparently have no clue of what you're getting into.
Nice post :)
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that's right, that's why you should study more before investing ....
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