Would You Take Out A Loan To Buy Bitcoin (That''s What Michael Saylor Recently Did)???
If you had one opportunity in a lifetime to front run the banks, the hedge funds, the institutions, the Smart Money, but you had to take out a loan to buy bitcoin, would you do it?
Well, that's what Peter McCormack did several days ago.
On Monday, Buterin shared a post on Twitter warning followers not to take out personal loans to purchase cryptocurrencies in hopes they will be able to pay off the loan including interest as the cryptocurrency gradually appreciates in value over the years.
“Please don't do things like this. I would NEVER recommend anyone take out a personal loan to buy ETH or other ethereum assets,” warned Buterin.
Buterin added, “7 years ago, before ethereum even began, I had only a few thousand dollars of net worth. I nevertheless sold half my bitcoin to make sure that I would not be broke if BTC went to zero.”
Is what Peter did any worse than what Don Conway or Didi Taihuttu did?
Don Conway Don was a 45-year-old middle manager at a major multi-media company in San Francisco, who earned $150k per year, but hated Corporate America. Don eventually took out a home equity loan for $200k and bought more Ethereum.
Didi Taihuttu, a 39-year-old man in The Netherlands, sold everything which included a business in exchange for bitcoin to travel the world with his wife and three daughters.
What makes what Michael Saylor did any different from Peter, Don or Didi?
Last week, MicroStrategy announced plans to offer $400 million of convertible bonds in order to buy more bitcoin. They ended up raising $650 million in two days. So that 650 million dollar offering at a 0.75% convertible senior notes isn’t due until 2025. Assuming they bought bitcoin at $18,000 they have paid for all the interests over the weekend and made a profit.
So going back to that Peter McCormack guy. Taking out that loan to buy bitcoin was a calculated risk, one in which he can easily pay back without having to eat bread and water for dinner for the next couple of years.
So, yes, I would make the same move as Peter, at least that's what I would advise the 24 year old Rolland and perhaps the 45 year old Rolland too if I knew what I know is about to take place over the next 12-18 months.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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