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# If I got a loan to buy bitcoin (BTC)? School case

What if you borrowed FIATs to buy bitcoins (BTC)? What would your investment do today? Good or bad idea? Let’s take a textbook case with this Internet user: he asked, in 2017, whether it was a good or bad idea to borrow euros from his banker (love the banker! Everyone knows that banks friendly crypto not common…)

First of all, it is important to emphasize that this article does not in any way constitute investment advice. There is always a risk in lending, big or small, and investing in cryptos too. It’s just a question here to see if our Internet user had a good idea or not since his message dates from 2017 and his refund would expire in November of this year.

## Borrow €50,000 to buy bitcoins (BTC)?

November 19, 2017. On that date, bitcoin was at 6,874.18 euros at the highest number of the day. At the lowest level 6,585.29 euros. Let’s say Stephen could have bought it himself 7.5 bitcoins (bitcoin at about 6666 euros). His bank loan, he would have to repay 865 euros per month for 5 yearscredit cost 1930 euros.

We imagine that Stephen has a fairly comfortable salary to repay such an amount every month. Even her banker agrees with the idea. The first answer in the forum, however, is: Hi, this is the worst stupid thing to do… » Seriously ?

## Calculation of return for buying bitcoin

So if Stephen had resold these days, at around €20,000/bitcoin, he would have withdrawn from this sale €150,000 (7.5 bitcoins x €20,000, we skip the details of early repayment and other costs of the case ). Either profit of it €98,070 (capital gain). He should have cut 30% of the taxes, the famous flat tax (29,421 euros), ie a net profit of €68,649 ! In other words 1144 € / month (with liach) over 5 years. (With a few months of swimming between August and the loan anniversary date next November.)

With a resale on November 19, 2021, at around €50,000/bitcoin, Stephen could then repay his loan in one go and keep the rest in bitcoin. Otherwise the proceeds of the sale would be 375,000 euros – 1930 (loan cost) = 373,070 euros – 50,000 (investment) = €323,070. With a 30% tax on capital gains (96,921 euros), he would have been left with a tidy sum of €226,149That is 4711 euros per month for 4 years! Slightly better than booklet A. .

## Moral: investing is a personal matter

If Stephen listens to his instincts, his loan will expire in November 2022, how much is bitcoin worth? Unfortunately, he is no longer on the forum, so we don’t know what he did. (Prepayments, administration fees, etc. are not included in the calculations). Why this expression? Simply stating that taking risk (investment) is a personal matter. It is to be discussed with the lender and as is commonly said ” invest only what you can afford to lose “. That, it seemed, was the personal situation of this netizen. He could, from a financial point of view, lose 50,000 euros.

## Investment is always a risk

In the last 5 years (since 2017), bitcoin (BTC) has experienced two crashes. Stephen could have sold, driven by the fear of losing everything (ALL). He could also invest in a platform that eventually went bankrupt or even trust a scammer. But it is clear that if he simply stayed (HODL) and he repaid the installments of his loan, we can say yes Stephen62, the nickname of our Internet user, made the deal great. So it was impossible to declare from the beginning, without knowing his personal situation, nor knowing in advance about the future of bitcoin, that it was “stupidity”.

It is necessary to emphasize that no investment is without risk. Whether it is renting real estate, shares, buying a business, shares in a start-up, there are always risks. No investor can say that he has always been successful: even prudent investors have been completely “robbed” by the sulphurous Madoff. But, on the contrary, those who don’t take risks have little chance of seeing their money grow in any way. When it comes to bitcoin (BTC) and cryptos in general, the media, governments and banks have done their best to keep people away from it. The only thing to do is educate yourself (DYOR) and get unbiased advice. It is still a long way from when states will offer specialized bitcoin training in public schools, as in El Salvador.

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Mary Batshwok

Subprime, financial crises, galloping inflation, tax havens… Bitcoin was designed for more transparency and maybe finally change the game. I try to understand this new environment and I try to explain it to myself. The road is undoubtedly long, but it is worth it.