So, there’s this dude from like 9 years ago who took out a $325k loan to snag 191 BTC. Sounds pretty reckless to me and many others who’ve stumbled upon this story from a reddit post almost a decade back.
If you check that post, you'll find folks who probably feel the same way you do.
Seriously, we don't recommend taking loans just to throw money into Bitcoin. It's way better to invest without the stress of monthly payments and interest hanging over your head.
That guy ended up deleting his account, so who knows what happened to him after all these years. Maybe he sold during the past market cycles or still has some left. No one really knows.
I know people are going to freak on on this decision but people who always take such risks always have more properties, not just one and also this is better than my friend who sold his house so that he can travel to another country in search of a better life.
He sold his two houses without having extra and the amount he sold those house is still not enough bro cover the expenses of his traveling plan, now he is stuck, he got served while he is still present in my country. People don't wager risks before they go for one, if you are going to use property to take risks make sure you have more than one.
If things worked out differently than you planned then you are not back to the beginning, if I have two houses and this opportunity presents itself I can sell one and buy Bitcoin, CZ did the same and that one decision changed his life.
Interesting!
That guy could've been easily one of the most inspiring stories in Bitcoin history, because of the risks he took. Though not so many would follow such an act because it bears a lot of risks, especially if one doesn't have enough emergency funds to back it up if everything goes south.
Let's assume this guy bought Bitcoin back in 2016 or early 2017(9 years ago from now) for a little under $2k, he probably has sold portions of it, if not all, in 2017 as Bitcoin rose 20x than the highest it peaked in 2016. Even if he sold it in the next couple of years, he would still have made a lot of profit from it. Even if he sold it all for around $10k/Btc, he still Nets more than $1.5m, and he got to pay that loan + the interest rate in just more than or less than a year.
It's quite interesting how this guy has been doing today, if this story is true. Judging by how huge his risk appetite is, he probably has more Bitcoin in his bag today.
It was a wrong thing to do, but one that eventually turned out profitable. Regardless, it was wrong.
I think it isn't wise to bet on your basic needs. You could forget about your dinner today to give way to lottery tickets. That's wrong. But it could also turn you into a millionaire. Regardless, that's wrong. I think this is the same story, albeit with different risk levels.
Even today, it might be more productive if you pawn all your belongings and use all the proceeds to buy Bitcoin and keep it for only 6 months. Again, that's still wrong.
I hope it turned out well for this person, even though the action and the logic itself is wrong, very much so.
As you said - no investment is done with funds you cannot see gone.. And taking loans to do it - that's just wrong on all the levels.
In 2014, a man known as "Brother 480,000" in the Chinese Bitcoin community used his down payment of 480,000 yuan (approximately $70,000)originally intended for a down payment on a houseto buy 100 Bitcoins, attracting widespread attention within the community. Later, when the price of Bitcoin plummeted to $300, he sold all his Bitcoins under pressure from his family, losing half of his investment. This story illustrates that under excessive pressure, especially when borrowing money, it is difficult to hold Bitcoin long-term, and the likelihood of failure is very high.
Looking back now, this idea seems absolutely brilliant (at this point). I'd like to be in that guy's shoes. He believed in bitcoin more than anyone else, and for that, he earned our respect and envy, as well as handsome dividends.
Judging by this guy's loan to buy bitcoin, he did everything right. But we need to consider whether he was able to hold on to bitcoin he bought and sell it at a profit (at what point?).
Without full details of how this story ended, it's difficult to judge whether his decision was a good one. I'd like to believe he was lucky, and that he didn't have to live on the streets with empty pockets (without bitcoin).
He deleted his account because he moved to his own island in the Maldives. What's so unclear?
Even if he only retained 10% of his assets, that's still quite a lot at this point.
This still means that the person used his own property to borrow the loan. He must be a wealthy person already before he borrowed the money. Also he may have alternative means of paying the money. People should not just conclude but they should first ask him questions about how he will pay back the loan.
Nobody will say you should not borrow loan but just that he should be able to pay for the loan if what you used the loan to do does not go his way as expected. Business reasons can be different but for bitcoin investment 9 years ago should not.
It's funny how most people sees bitcoin investment, some think bitcoin investment is mandatory but no" it is not mandatory it's just a matter of choice. But this case seems different, I think maybe he's just trying to be more aggressive in his bitcoin investment, but he seems to be going about it the wrong way. If you want to be aggressive in your bitcoin investment you only need to do that with your discretionary income or maybe with your reserve funds instead of taking a loan, because doing that does not make you a wise investor because an Investor that knows what he's doing will never think of going for a loan no matter how sweet the opportunity is because he knows the disadvantage of investing with a loan money.
I wouldnt have risked doing it that way, but the guy essentially made the right decision he took a risk and won. Personally, Im closer to accumulating bitcoin through regular, consistent investing. I generally dont like any kind of credit and try to avoid it altogether, although perhaps I should reconsider my attitude toward it. When bitcoin drops in price, taking a loan might make sense, but only if the repayments are easily manageable.
It's easy for those who have other properties or can easily afford to clear the loan to take such risks and to them it's not really a risk. maybe he just can't access that amount at the moment and decided to take a loan and he probably has other means of paying the back the loan. To me it's really a nice idea, he saw a huge potential in Bitcoin to make that decision, I just hope that he did sell them early so he can reap what he sow.
Loans are not advisable when Investing in Bitcoin because most people don't have a means of paying back and it usually messes them up. Investing shouldn't be forced when you can't invest with what you can afford to lose and selling your house to invest is also a bad idea because Bitcoin investment is not for fast gain but for the long term. If you don't have an assured means don't sell your property or take loans to invest.
I would advise a risk taker to take some loan, but in reality how are we actually going to manage it, like, if I take loan from someone, for a year at least, I can take interest free loan as well, but let's say if I invest it in the bitcoin for a year and after a year I make loss instead of profit, how will I pay the loan back, now imagine the loan with interest, that makes it extra stressful.
I would also say not to take loan for investing in bitcoin, but just like you said, this dude did it, so does many big ETF companies like MicroStrategy is also doing it.
I see this as courageous risk, though this adventure need proper calculation especially when you have nothing else around and what you have in mind to engage or take this risk is your last hope it will really be a dangerous one but looking at the year of investment this risk is full of good yield, any investor that lack what it takes to invest wisely will always end up on wasteful and regrettable investment, to advise investor on investing in Bitcoin mostly once it has to do with borrowing or taking if loan may be the highest except the investor is fully taking charge of any loss without blame on the adviser, it's better to invest in Bitcoin than some who sell off property to travel around the world searching for job that they may not even see.
Some people risked their lives to acquire Bitcoin when the price was so low. They made a bold decision when most people were hesitant to accumulate Bitcoin. And then that risky decision proved to be the best one when they later earned millions of dollars from their investment.
But even if it worked out for them, it was still a very high-risk decision. Especially when taking out a loan to get money to invest in Bitcoin, it's something that's not recommended.
It's better to invest within your means.
The question is, how much he sells it for, and we know that when it comes to loans, especially those that are big, there is a monthly due. Is he selling it little by little to pay off the loan, or does he really have something ready to pay off the debts for a few years that he doesn't need to touch what he invested in BTC? The story is interesting to me, and if his life is okay now with that amount of money, it will really change his life a lot.
It's high risk and high rewards, but if he really has assets that can be used to cover the loan in case he makes a wrong decision, it's not that worrying, because he has money to pay.
Only those who really confident to dare take a loan to invest in bitcoin because seems these people will know invest in bitcoin is profitable but if want to gets profit i think bitcoin should be holded by long term but the most problem if we loan the money is people should be pay the debts which usually monthly debts so, to paying the debts people should have source of income which should be steady because that can ensure we have the ability to pay our loan money but in my opinion loan money to invest still risk decision especially if you were loan money from the bank which required collateral because if you failed to pay then your asset will be confiscated
I think most people would keep it the safe way, but we know for a fact there is always a portion of people who would gamble or try something much and much riskier for themselves..
I don't outrightly advise people not to take a loan to buy Bitcoin. I advise based on the terms of the loan. If it's a loan they can pay back if the plan fails, then they can go ahead. Also, what they should consider is whether the loan is a long-term loan. Because if they take a loan that will require them to start paying back within a year, then they're in trouble because they might have gotten any profit within that time.
Taking a loan to invest in Bitcoin should be a very well-calculated risk. It shouldn't be done simply because you're running out of options, or out of separation or simply just done for the sake of it. And it should be money you can pay gradually from your income if things fail.
People take loans all the time, so taking a loan for bitcoin is not the worst decision.
I have heard this story but haven't heard back about the current situation. He has taken the risk; it's not only a risk, it's highly risky to take a loan against the house to purchase Bitcoin. Not sure if he has still been holding or not, but if I were he, then probably I wouldn't hold till now due to greedy behaviour. I would sell even after double the price, so I am curious to know what he actually did. But for me, I won't take a loan against my house; rather, I will accumulate through DCA.
I don't encourage anyone to take a loan for buying Bitcoin; it would be a suicidal attempt, according to me. Because we don't know when we can get the good return from the Bitcoin investment. So the best strategy is DCA: accumulate what you can afford to lose or hold for years. Hope that guy takes out good profits even though he still hasn't held.
I saw the post two years ago on Reddit, and if you take a moment to read people's comments, the majority were critical of his decision. Also, if I had commented then, I would have criticized his decision too, just like everyone. But looking at how the price of Bitcoin has appreciated over the years, he was right after all. His calculated risk paid off.