Everyone is looking to make extra money. In a less than ideal economic climate, providing for one’s family has become increasingly difficult. When Bitcoin boomed to over $20 000 in 2017, a lot of people wanted to get in on it with the hope to see huge gains. A lot of investors got loans or sold their cars to buy cryptos and may now be struggling financially to make ends meet. This begs the question – Should one get a loan to buy more cryptos?
Neil Roets, CEO of Debt Rescue South Africa recently told MyBroadband in an interview that a lot of South Africans are filing for bankruptcy after investing in so-called cryptocurrency scams. Roets told the media that most people applying for debt rescue, fell victim to some scam that promised investors huge gains should they invest. Following Bitcoin’s astronomical rise in 2017, the market is currently going through a healthy correction. Several people who are now applying for debt rescue, cannot meet their financial obligations. Since they took out second bonds on their houses, made massive debt and maxed out their credit cards to buy Bitcoin when it was at an all-time high. Roets said investors also lost large sums of money due to the volatility of the market.
Inexperienced investors are bombarded on a daily basis with emails reading:
“Earn a Guaranteed $13,000 In Exactly 24 Hours!”
“Click here for bitcoin purchase!”
What about articles that read as follow:
“People in Johannesburg are becoming rich thanks to this system.”
Investors should exercise caution when investing in these types of schemes. They may not be scams but one should always do your own research before making any type of investment. Don’t be afraid to ask the difficult questions and listen to what your gut tells you. This is by no means limited to South Africans as investors in America are posting on social platforms that they too have borrowed money to invest in cryptos. One investor blogged that he is currently living under a desk and eating free food/snacks. He has maxed out his credit cards and borrowed money. He owns nothing but is sitting on 3 million dollars’ worth of Ripple.
Should I borrow money to invest in cryptocurrencies?
Making debt you cannot service is not recommended. Due to the extreme volatility of the cryptocurrency market, it is important that you do not FOMO (Fear Of Missing Out). FOMO is when investors buy a hyped coin when it is at its all-time high only to be disappointed when the coin loses value. Unfortunately, Bitcoin has inspired hysteria amongst new investors who do not fully understand what cryptocurrencies are about. It is important to learn as much as you can about the industry before investing your hard-earned money. It is recommended that you buy as many cryptocurrencies as you can afford without running the risk of going bankrupt. Remember to use money that you can afford to lose.
Investing in a miner
An alternative to buying Bitcoin is to invest in a Bitcoin miner. The machine is linked to a mining pool and one gets paid for the contribution your machine makes to the pool in terms of hashing power. The proceeds are paid into a Bitcoin Wallet that is linked to your profile. The machine works around the clock and requires you to connect it to electricity and internet. This way, you won’t be biting off more than you can chew.
Check out the new Avalon 821 111Ths Bitcoin/Bitcoin Cash miner at Bitmart.