This report was originally published by Michael Snyder at The Economic Collapse
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…
If someone knew exactly what would happen throughout 2018, that individual could make an absolutely obscene amount of money.
Unfortunately I don’t know where cryptocurrencies are heading, but it does appear that things are about to get a whole lot more interesting. According to Reuters, it looks like you will soon be able to invest in Bitcoin using leveraged ETFs…
The new idea is to build “leveraged” and “inverse” funds that would rise – or fall – twice as fast as the price of bitcoin on a given day.
Direxion Asset Management LLC plans to list such products on Intercontinental Exchange Inc’s NYSE Arca exchange if U.S. securities regulators give the nod, according to a filing by the exchange this week.
In the filing, the exchange said the listing “will enhance competition among market participants, to the benefit of investors and the marketplace.”
So if Bitcoin rises or falls a thousand dollars in a single day, those financial instruments will be designed to move by about twice as much.
That should be fun.
Meanwhile, some are asking what will happen to cryptocurrencies such as Bitcoin, Ripple, Ethereum and Litecoin if the long-awaited collapse of global financial markets finally happens this year.
Well, some believe that it would be doom for cryptocurrencies, but others believe that cryptocurrencies would be like gold and would actually do extremely well during the next great financial crisis…
The question is what will happen to Bitcoin and Cryptocurrencies once the financial collapse takes place. The signs are that when economic circumstances start to deteriorate the price of Bitcoin rises. A prime example of this is during the Cyprus and Greece bailout which saw the price of BTC rise considerably during this period. With banks stopping access to cash in ATM machines, Bitcoin was the perfect solution to be able to store it safely out of the banks and Governments’ hands.
What also happens during a depression is interest rates skyrocket and start to see hyperinflation. This will mean it is extremely hard to get finance from banks and the cost can make it unsustainable. The ICO market is a perfect solution to this problem and as the banking sector suffers, ICOs will boom. More companies will look to these as a cheap way to raise money and will create their own cryptocurrency.
It will be fascinating to see how all of this plays out.
There are some financial experts that believe that Bitcoin is going to zero, and there are others that are absolutely convinced that it is going to a million dollars.
As with so many things in life, timing is everything. If you are investing in Bitcoin, let us just hope that you got in at the right time and that you will also get out at the right time.
Michael Snyder is a pro-Trump candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.
Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream.
If you want to know what is coming and what you can do to prepare, read his latest book [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].
bitcoin is some crazy $hit
all us dollars are federal reserve note debt instruments owned by foreign banks?. so is only a small amount bought with U.S. dollars?
22% used credit or debit cards?
Debit cards are not debt. Credit cards with 0%interest in the first year would be debt but a smart investment till now and perhaps for some time in the future.
I would never use a regular credit card for an investment, but even in this case, borrowers have made out like bandits because bitcoin and other crypto currencies have gone up so quickly and so much, and they will continue to go up.
I think everyone should get at least a little in bitcoin. If and when the dollar collapses, crypto-currencies will be taking the place of cash. If you don’t have some, you will be left out in the cold.
This is why it is so important to grow your own food, have warm clothing, and be able to survive without electricity, gas, running water, and garbage collection.
I just bought some honey. It has no expiration date.
Bitcoin is a total fraud. Just like any pyramid scheme or ponzi scheme, the profits look good until the music stops. The worst part of this scheme is that main stream mutual funds are starting to get on board. That will totally destroy the system when collapse happens.
I wont invest in anything that is not a hard assets or at least pays a dividend.
Your arrogance is exceeded only by your ignorance.
When the dollar crashes, I assure you that bitcoin won’t be worth a tinker’s damn either.
A fool and his money are soon parted.
It’s going to be fun watching the sheep get fleeced when this thing goes belly up……..and it will.
B from CA
It doesn’t matter if there is interest or not on the debt. They don’t have the capital to make the purchase. Purchasing stock on credit was one of the root causes of the 1929 October crash. “Those that fail to learn from history are condemned to repeat it”.
3 rate hikes and a mild summer recession will cause bitcon to fall below $200.00 S&P will finish 2018 above $3k. EOY 2018 Bitcon price???? That depends on how much new government regulation will be needed after half of the bitconnie lookalikes crash and burn. I put zero faith in electronic coupons that you pay for up front. To me, Bitcon is just an electronic coupon – actually counterfeit.
22% of the investors are proof that Darwinian selection just has not occurred yet. The other 78% are proof that you just can’t fix stupid. Oh wait!!! I see Tinkerbell!!
Greed ,manifested through “strategy’s” that promise “something for nothing”, “get rich quick” has been a driving force of the foolhardy throughout history. Its enticing because its easy. Easy is far more alluring than difficult. Is it a Ponzi scheme? Highly likely. Looks like Amway to me.
wow, you described the NRA to at T!
you would make a fantastic psychology project. you seem to understand the NRA perfectly but are still programmed to love it?. patty hurst would be amazed.
They are adding debt to buy air. Fucking geniuses. I’ll sell them a rock for a dollar.
my $20000 of crypto is now $170000 after 2 months, I’m converting some to hard assets and laughing all the way to the bank.
i love you, i am glad you made money. i have a dead horse i need to sell fast before it stinks up the place. i take bitcoin too?
You people are embarrassing. You know nothing about crypto. What about populous? The banks make 28% NET profit a year charging fees for factoring. Populous will do it on an unbreakable Blockchain for 2%.how much of that trillion dollar market will they grab and what do you think that ppt token value will be when they launch? Morons.
Why the fuck are my posts not posting?