Why you shouldn’t use a personal loan to purchase cryptocurrency

CryptocurrencyWe have all heard fantastic stories of the meteoric rise in the value of Bitcoin, Ethereum or any one of the many other cryptocurrencies available. Sure, there have been many glory stories of people making millions in a short space of time. We do not hear the sad stories nearly as often. Many people have lost a lot of money with cryptocurrency.

Although the bigger ones like Bitcoin have been around for some time, it is still a fairly new concept and extremely volatile. Governments the world round are having difficulty debating how to control this largely unregulated currency. Any major changes or even talk of changes can cause sudden and dramatic fluctuations in the price. Expect more attempts at control from world governments. We do not know what the future holds in term of the international interference or involvement in cryptocurrencies.

There are no sure bets in life otherwise most of would be rich. Just as many people have borrowed money to invest in a stock that was a sure thing, only to lose their shirt, the same applies to cryptocurrency. A sudden 30 percent drop, or more, is too much for most speculative investors to stomach.

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The concept is great and the underlying blockchain technology is brilliant but it is still highly volatile. It also takes a lot of time and effort to make money. Most people that made decent money with cryptocurrency actively traded, they did not just buy and hold (or HODL as they say in the cryptocurrency world). Apart from those that got in relatively early but I believe those days are over.

There are also a huge amount of scams and they are growing over time. This is unlikely to change and many people have lost vast amounts of money through cryptocurrency scams or thefts.

If you have a bit of spare money and some time on your hands, it could well be worth a shot. Borrowing money that you could lose and spend years (and interest) paying back is simply not a prudent investment.

We do not know what the future holds for cryptocurrencies and despite the hype and excitement, I believe a wait and see approach is advisable. Many of the wealthiest investors and sharpest financial minds feel the same way.


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