Investors: 60% Used Borrowed Funds to Buy Their Now-Crashed Coins

Investors who borrowed money to buy cryptocurrencies are feeling the heat now. Here’s the breakdown of how they raised the funds to buy their crypto.

A recent study has discovered that over two-thirds of cryptocurrency investors surveyed had borrowed money to make crypto purchases. Rather than using income or savings, they got into debt for their cryptocurrencies of choice.

64% of those who bought cryptos used one or more credit facilities to get the sum they needed.

At the time, this may have seemed like a sound strategy. But in the last month, prices of mainstream cryptos have dropped by as much as 100%. This fall will leave many investors facing large losses. And they will still have the cost of repaying their original loan.

Some investors are expected to sit tight, others may panic and sell to cut their losses.

Investors by age breakdown

Borrowing money to buy crypto seems to be a young person’s game, with those aged 18 to 24 most likely to have borrowed money to  buy their fave cryptocurrencies.

18 – 24: 70%

25 – 34: 64%

35 – 44: 68.9%

45 – 54: 62.5%

55 – 64: 45%

65+: 25%

How they borrowed

Different credit facilities have been used to fund cryptocurrency investments, with credit cards and overdrafts leading the way.

Credit card – 35.5%

Overdraft – 19.3%

Personal loan – 14.6%

Secured loan – 9%

Payday loan – 7.6%

Re-mortgage – 3.3%

Holly Andrews is the Managing Director at KIS Finance. “…Some credit card providers will view this type of transaction as a cash advance, meaning a cash advance fee and higher interest rate will be applied. So, if you are thinking of making an investment into cryptocurrencies, you should only invest an amount of money that you can afford to lose and it should be funded through income and/or savings rather than a credit facility.”

While the crypto market is volatile, many commentators are predicting the price of the mainstream cryptos to return to record highs, while others say it is a sign of global recession. Borrowing money to buy cryptocurrencies could be a good decision in the long run. Only time will tell.

Got something to say about investors borrowing money to buy crypto or anything else? Write to us or join the discussion in our Telegram channel. You can also catch us on Tik Tok, Facebook, or Twitter.

The post Investors: 60% Used Borrowed Funds to Buy Their Now-Crashed Coins appeared first on BeInCrypto.

Earning Passive Income With Crypto

Related Posts

Investment: How To Calculate The Attractiveness of a Cryptocurrency

Investment: Asset manager, financier, and cryptocurrency teacher Alexander Alexandrovich Ryabinin says the investment attractiveness of digital assets can be determined by analyzing inflationary and deflationary processes. The…

Rich Dad Poor Dad’s Robert Kiyosaki Says He’s Waiting for Bitcoin to Test $1,100 to Buy More

The famous author of the best-selling book Rich Dad Poor Dad, Robert Kiyosaki, says he’s waiting for the price of bitcoin to test $1,100. He added that…

This is the Future of the Liquid Staking, Based on the Past

Staking and the future: The liquid staking industry is at a turning point, says Simon Furlong, the Co-Founder of Geode Finance. The various opportunities across DeFi and cryptocurrency…

Book by Nigerian Author Reminds New Adopters Why Bitcoin Was Created

Nigerian author and crypto advocate Nathaniel Luz has said his recently published book represents his attempt to remind people of the initial reason why bitcoin was created….

Voyager Digital Issued Notice of 3AC’s Loan Default; Here’s What Might Be Next

Crypto hedge fund Three Arrows Capital (3AC) has defaulted on an estimated loan of $670 million, as per the market update by Voyager Digital. In a release dated June…

Kaiko Triples Valuation With Latest Funding Round

Blockchain analytics firm Kaiko raised $53 million during its latest financing round from new and existing investors. The Series B round managed to triple Kaiko’s valuation since…