Bitcoin Feeding Frenzy Sees People Put Their House on It
In a bid to get some skin in the game people are mortgaging their houses in order to buy Bitcoin.
The recent skyrocketing Bitcoin price has brought about a fresh wave of interest and adoption. People are hearing about the fantastical gains that can be made from investing in Bitcoin, leading some of them to make brash decisions.
There have been some cases of individuals even putting their houses up for mortgage in order to acquire capital to buy into Bitcoin. It speaks of the frenzy that has developed recently.
The frenzy of people getting into the market should be viewed with caution however as the old adage is still: ‘Don’t put more into Bitcoin than you are willing to lose’.
There have been instances of not only mortgages being taken out to buy Bitcoin, but also people using credit to buy the potentially explosive and volatile asset.
Joseph Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection, and director of the Alabama Securities Commission, has seen some worrying trends developing in Bitcoin investors.
"We've seen mortgages being taken out to buy Bitcoin. … People do credit cards, equity lines. This is not something that a guy who's making $100,000 a year, who's got a mortgage and two kids in college ought to be invested in.”
Borg’s outlook could be considered a little one-eyed, stating that people should not be investing in Bitcoin if they have other costs, but what his point should be is that like with everything, investing should only be done with money that is disposable.
The issue is, there are many stories of Bitcoin breaking the shackles of debt and servitude to banks for its investors. However, it is senseless to use debt to try and get out of debt, especially with such a volatile asset as Bitcoin.
Investing in Bitcoin is not the issue, it is the circumstances in which one finds themselves making that investment. The use of credit cards, mortgages, or any other lines of debt is dangerous as the future is still uncertain with the digital currency.