I want to preface this by saying I hate even owing family and friends money let alone accumulating potentially life ruining credit card debt. I have zero investment experience but I want to discuss a hypothetical that I’ve been running through my head lately.
Bitcoin has increased in value nearly 700% in the last 12 months and analysts are predicting it’ll be worth $10kUSD by the end of the year and hundreds of thousands in a few years more. Looking around I see banks offering credit cards with 10%APR fees, possibly even lower with zero repayment periods and balance transfers. Coinbase allows you to buy bitcoin by credit card at a 4% markup so to break even on the credit card loan my investment needs to increase in value by 14% (+ selling fee and taxes of course) and the rest is profit. Bitcoin is highly liquid so I could sell off as much as is required to pay off the loan and keep everything above that. As the growth of bitcoin shows no signs of slowing down it seems virtually assured that this would generate massive amounts of wealth relatively quickly, even if the current rate of growth slows substantially.
How is this a bad idea? What stops this from being a once in a lifetime get rich quick opportunity?
Submitted November 01, 2017 at 08:48AM by Christobell_ http://ift.tt/2A67IQi
