Study Finds That 22 Percent Of Bitcoin Investors Are Using Debt To Fund Their Investments
By Michael Snyder
TheEconomicCollapseBlog.com
January 7th, 2018
Investing in cryptocurrencies such as Bitcoin, Ripple, Ethereum and Litecoin is extremely risky, and experts all over the country are warning that people should only invest what they are willing to lose. Unfortunately, many are getting swept up in the current euphoria surrounding cryptocurrencies and are not listening to that very sound advice. A disturbing new survey that was just released found that 22 percent of all Bitcoin investors are either directly or indirectly investing in Bitcoin with borrowed money…
According to LendEDU, a personal loan research firm, more than 18 percent of Bitcoin investors have used borrowed money to trade the cryptocurrency. In a global survey of 672 active Bitcoin investors, researchers asked traders the method they used to fund their cryptocurrency trading accounts. The majority of investors used banking systems such as credit cards and ACH transfers to fund their accounts.
But 22 percent of traders revealed that they have not paid off their credit and debit cards after purchasing Bitcoin, effectively investing in the cryptocurrency with borrowed money.
Credit card debt is one of the most toxic forms of debt that you could ever carry, and investing in anything when you still have credit card balances is extremely unwise.
Yes, cryptocurrencies went on an epic run in 2017, but there is absolutely no guarantee that they will continue to rise in 2018.
In fact, there is a very real possibility that we could see a cryptocurrency crash, and there are many investors that are actually eagerly anticipating one…
Well, as many traders expected, it appears that institutions are using the futures product to slowly but surely build a short position in bitcoin. According to the CFTC Commitment of Traders report (available CBOE futures), non-commercial traders held a net short position of around $30mn as of Tuesday Dec 26, or around half of the total open interest.
Separately, the Traders in Financial Futures breakdown provided by the CFTC show that the leveraged funds category that consists largely of hedge funds and various money managers had a short of around $14mn, or around a quarter of the total open interest.
In other words, spec investors have used the futures contracts to establish Bitcoin shorts.
On the other hand, there is also the possibility that cryptocurrencies such as Bitcoin could continue to defy gravity and soar even higher over the next 12 months.
In fact, a rumor that Amazon.com will soon start accepting Bitcoin has lots of people buzzing…
As a backdrop to all of this, there is a strong rumor that Amazon is about to accept Bitcoin as a method of payment. Patrick Byrne, the CEO of Overstock, has stated that Amazon will soon have no choice but to start accepting it. He is quoted as saying, “… they have to follow suit. I’ll be stunned if they don’t because they can’t just cede that part of the market to us if we are the only main large retail site taking Bitcoin.” Scott Mullins, an Amazon executive has confirmed that Amazon is, “working with financial institutions and crypto-experts to spur innovation, and facilitate frictionless experimentation.”
If the Amazon rumor turns out to be true – Bitcoin will probably go into orbit! Be prepared…
The Rest…HERE
