Secondly, Bitcoin is compared to gold as a store of value. Which is what almost everyone compares. But have you ever seen someone buying gold with debt?
There likely have been people using debt to buy gold, especially if they believe that they are in a period in which gold prices are about to go up, yet, sure, it may well make less sense to borrow money to invest in gold since gold is largely a mature asset class that may not have as much chance of upside.
If someone buys gold on loan, then to me it seems more of a hassle than a profit. Because, the price of gold increases slowly. Usually on average 3-7% per year. On the other hand, the interest on the loan can be 8-16% per year or more. In this case, there is a risk that the cost of the loan will be more than the profit. It may not be possible to hold gold for a long time due to the pressure of the loan.
JayJuanGee Sir, what you mentioned that perhaps some people have used loans is very true. But their method may be different. It may also be that they have taken the loan from someone they know. The acquaintance may not take part in the interest or profit of the loan. Or it may be something different.
Actually, no one does that. It seems completely unreasonable. If we consider it unreasonable to buy a stable asset like gold with debt, then taking a loan to buy a volatile asset like Bitcoin seems even more unreasonable to me. What do you think?
You are arguing nonsense, even though sure it might not be a good idea to take out loans to buy bitcoin, yet you surely have not argued any kind of a convincing point of view.
JayJuanGee Sir, maybe my statement did not sound convincing to you. The main purpose of my statement was to explain that the risk level in investing with debt is so high that if the market goes in the opposite direction at the wrong time, it can seem like a death sentence for the investor. However, I admit that sometimes there can be a possibility of opportunity in investing with debt. It is like light and shadow. Just as light creates shadows, bad things hide behind good things. Bitcoin has been providing opportunities to investors for more than a decade. It will continue to provide opportunities to investors for many decades to come. The real goal of Bitcoin is not to jump into risk blindly due to the hunger for quick opportunities and dreams of profit. Rather, by prioritizing one's basic needs. Long-term investment with extra money can be the success of all of us.
People do use loans for all kinds of reasons, and they do not necessarily rely on a gullible friend/relative to give them preferential terms. We have an over indebted society, and part of the reason is that debt is cheap and it also reflects various ways that the dollar (and other fiats) has been undermined through the years and even debased through the issuance of debt.
Just because the debt system is a bad system for society, rich people use debt to their advantage, and getting cheap debt can frequently allow for way more money to be made, as long as you know how to use debt in a way that you are finding higher returns on your money and that you are not putting yourself into a place in which you are not able to pay back the loan and/or that you might even put collateral into jeopardy if you are not using the debt in profitable and prudent ways.