Crypto Fanatics Are Borrowing To Buy More Crypto

Crypto Fanatics Are Borrowing To Buy More Crypto

Risky News It should be noted that a well-rounded portfolio of stocks and bonds with straight forward asset allocation can be a perfectly fine guard against inflation. In fact, just investing in a fund that tracks the S&P 500 will typically give you a solid annual return that beats inflation. There’s nearly a century worth of data that shows this. There are a number of massive risks that come with attaining a crypto loan. For one, borrowing massive loans to invest in cryptocurrency (or really any other financial asset) is reckless. It’s really not unlike borrowing money and then heading to the casino. You hope you win but there’s a big risk of losing. That’s pure speculation and a recipe for disaster.

While many use crypto lenders to help purchase homes and cars, some are also using loans to purchase more cryptocurrencies. For example, a 27-year-old man named Kris Kostadinov took out a $14,000 loan from Aave, a crypto borrowing and lending platform, and used it to purchase ether along with a variety of NFTs. He said that his loan funded investments now worth more than $60,000.  Borrow Crypto to Buy Crypto

“If it was in a bank account, my money would just be going down, with inflation eating away at it,” Kostandinov told the WSJ. Similarly to a bank, crypto lenders take deposits to fund loans that leverage crypto as the collateral, according to The Wall Street Journal. The loans can come in the form of traditional fiat currencies like US dollars or a stablecoin (a form of crypto that attempts to peg its worth to a real-world asset like dollars). Unlike a bank, these crypto lenders aren’t insured by the FDIC. That means if there’s a security breach and all the money gets taken, depositors can’t get their money back. 

More on crypto: Edward Snowden Predicts Massive Bitcoin Adoption by Governments Futurism Readers: Find out how much you could save by switching to solar power at UnderstandSolar.com. By signing up through this link, Futurism.com may receive a small commission. READ MORE: Bitcoin to Bucks: Crypto Fans Borrow to Buy Homes, Cars—and More Crypto

As with anything finance related, though, it’s good to just practice common sense. Don’t take out massive loans to play the market. And maybe don’t blow your money on a bunch of shifty NFTs while you’re at it. Also the volatility of cryptocurrency adds an additional danger factor. If the value of your collateral falls, a crypto lender can enact a margin call and take your money. Since crypto is notoriously volatile, there’s a good chance that can happen.

The News Highlights

  • Crypto Fanatics Are Borrowing To Buy More Crypto
  • Check the latest News news updates and information about business, finance and more.
Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
Ransomware attack before holiday leaves companies scrambling
Kenya’s former sports minister guilty of corruption pays $32,000 fine
Stephen Soi, a co-accused in the trial who was the Kenyan team’s chef de mission in Rio, was also convicted on the same charges and sentenced to 12 years in ...
Biden Tasks OSHA With Vaccine Mandate For Small Agency And Big Job
Biden Tasks OSHA With Vaccine Mandate For Small Agency And Big Job
And the legal challenges to Biden’s vaccine mandate will be unrelenting: Republican governors and others call it an egregious example of government ...
After seeing the new iPad Mini, I’d rather have a pocket-sized Android tablet than another foldable phone
After seeing the new iPad Mini, I’d rather have a pocket-sized Android tablet than another foldable phone
Despite the failings of the original Duo, Microsoft might actually hit out of the park if it takes a few pages from Apple’s iPad playbook. Here’s what I ...
A cell phone found at the crime scene has been linked to a suspect in a double homicide in North Memphis
A cell phone found at the crime scene has been linked to a suspect in a double homicide in North Memphis
Police said the two people were killed outside a home on the 2000 block of Eldridge from apparent gunshot wounds. The man and a woman were inside a red ...
Players on Xbox One and PC Report Graphical Bugs, Audio Issues, and More in the Vanguard Beta
Players on Xbox One and PC Report Graphical Bugs, Audio Issues, and More in the Vanguard Beta
The Vanguard Beta really hasn’t had the strongest of starts, but that’s what an Open Beta is for. Despite this, players have been sending in reports of lag ...
Panthers wait for Gonzalez to solve the revolving door on the kicker
Panthers wait for Gonzalez to solve the revolving door on the kicker
Gonzalez will assume kicking duties this week when the Panthers host the New Orleans Saints in an early NFC South showdown. Carolina signed him after ...
US Unemployment Claims high After Hitting Pandemic Low
US Unemployment Claims high After Hitting Pandemic Low
Applications for jobless aid rose from 312,000 the week before, the Labor Department said this morning. Jobless claims, which generally track the pace of ...
Non-Emergency Phone Lines at LPD Are Down
Non-Emergency Phone Lines at LPD Are Down
This outage is not impacting 911 services. Please continue to dial 911 in case of emergency. We are working toward a solution with our telephone partner. ...
McConnell warns Yellen that the GOP will not help raise the debt limit
McConnell warns Yellen that the GOP will not help raise the debt limit
Lawmakers appear to have only a few weeks to reach a compromise over the federal government’s debt limit before the U.S. Treasury is forced to delay or miss ...
BlackBerry Protects Group Phone Calls and Messages from Eavesdropping
BlackBerry Protects Group Phone Calls and Messages from Eavesdropping
The global pandemic has forced millions of employees into working from home. To avoid disruption, teams are turning to group calling methods to ensure ...
Show next
Compsmag - Latest News from tech, business and health
Logo