Redditor up 25% after boldly taking out $59K worth of personal loans to buy BTC

A Redditor and member of the r/CryptoCurrency community claims to be up 25% or $19,500 after taking out three personal loans worth a combined $59,000 to buy Bitcoin (BTC) over the past 18 months.

According to the Redditor, whose account is crudely named “Vaginosis-Psychosis,” they now have a total of 2.65 BTC, which is worth $80,400 at current prices, and are betting big on the price of BTC hitting $100,000 by early 2025.

In a June 30 post on r/CryptoCurrency, the user gave a run down on how they approached the highly risky method of getting their hands on BTC.

The first two loans were taken out in February and June of 2022, totaling $15,000 and $20,000 apiece. They had a fixed annual percentage rate (APR) of 6% and 4.9% each, with monthly payments totaling $225 and $326.

The third loan worth $24,000 was then taken out in June this year, with a fixed APR of 8% and monthly payments of $405.

So far, the Redditor claims to have recently paid off the $15,000 loan in May, along with chipping down $3,500 on the second loan. From here, they plan to attack the most recent loan, as that has the highest APR.

They claim to have accrued BTC at an average price of $24,000 when including interest paid, or $22,264 when not including interest paid.

“The way I see it, the US dollar is rapidly declining in value and prestige. Therefore, I will take out loans to buy Bitcoin and pay back said loans with inflated dollars that I earn from my job.”

“I don’t expect Bitcoin to be trading in this range 18 months from now. I expect BTC to be ~$100K per coin by then, so I’ll bite the bull of a short-term high APR for the long-term exponential price appreciation of Bitcoin,” they added.

Related: US SEC deems spot Bitcoin ETFs filings as inadequate: Report

The post has more than 500 comments at the time of writing, with some supportive of the idea, while many others have warned of the dangers of taking such an approach.

“Taking [a] loan for crypto investing sounds like a horror story to me,” the top comment with 457 upvotes from user “middlemangv” reads, with “NotAdoctor_but” adding: “Because it is. This is survivorship bias at its finest, also OP took a calculated risk, most won’t.”

Giving further context, the Redditor stated that they are single with no kids and earn around $60,000 from their job annually. They also stated that they have an affordable renting situation, and are happy to invest 25-30% of their income into BTC each month.

As such, the major risks in this instance would primarily be around the price of BTC crashing heavily and not recovering over the next few years, or losing their holdings via a hack if they do keep them in a hot wallet.

Maintaining employment would also be vital to keep chipping the loans down.

“You seem able to pay this. A win here can change your life. A ‘loss’ i.e., BTC doesn’t go above $35K for three years +, would just mean another year of work. Worth the risk, congratulations OP,” wrote user “Kakoyiannaros.

Magazine: Home loans using crypto as collateral: Do the risks outweigh the reward?