In a daring move, a Redditor and member of the r/CryptoCurrency community, known as “Vaginosis-Psychosis,” claims to have achieved a 25% return on their investment after taking out three personal loans totaling $59,000 to purchase Bitcoin (BTC) over the past 18 months. Currently holding 2.65 BTC, valued at $80,400, they are optimistic about BTC reaching $100,000 by early 2025.
The first two loans, amounting to $15,000 and $20,000, were secured in February and June of 2022 with fixed annual percentage rates (APR) of 6% and 4.9%. Monthly payments for these loans were set at $225 and $326, respectively. The third loan worth $24,000 was acquired in June of this year, with an 8% APR and monthly payments of $405. The Redditor claims to have already paid off the $15,000 loan in May and made a $3,500 repayment on the second loan. Their plan is to focus on paying off the most recent loan due to its higher APR.
Taking advantage of low prices, the Redditor has managed to accrue BTC at an average price of $24,000, considering the interest paid, or $22,264 without factoring in interest. They justify their approach by stating their belief that the value of the US dollar is declining, and they aim to repay the loans using inflated dollars earned from their job.
While some commenters on the Reddit post support the Redditor’s strategy, others caution against the risks involved. Concerns include the potential crash of BTC’s price without recovery over the next few years and the vulnerability of their holdings to hacking if stored in a hot wallet.
The Redditor provides further context by disclosing that they are single, have no dependents, earn approximately $60,000 per year, and have affordable living expenses. They are comfortable allocating 25-30% of their income each month towards BTC investments. However, the success of their approach hinges on maintaining employment and diligently repaying the loans.
Although this risky investment strategy has yielded positive results so far, it is important to consider the volatility of the cryptocurrency market and the potential consequences of high-interest loans. The Redditor’s story serves as a case study highlighting both the potential rewards and risks associated with such unconventional investment practices.
Conclusion
Overall, the Redditor’s journey showcases an individual’s bold move to invest in Bitcoin using personal loans, resulting in substantial gains thus far. It prompts discussions about the viability and implications of utilizing borrowed funds for cryptocurrency investments while emphasizing the importance of careful financial planning and risk assessment in such endeavors.