The Director of the securities Commission of Alabama Joseph Borg (Joseph Borg) said that the Americans began to take out a mortgage to buy a bitcoin. In addition, to buy cryptocurrency also emptied the credit cards and taken home equity loans. Such risks can drive investors into deep debt, if not to make homeless.
Many were inspired by the story of «that guy from Reddit» who took out a mortgage $ 325,000 and bought all the money in bitcoins. Then the price of the cryptocurrency was about $ 3,000. Now it is cryptocurrency the state is around 1.5 million dollars. However, Borg argues that such cases are not isolated, and the higher bitcoin rises, the greater risk faced by taking loans people.
In a recent interview for CNBC, Borg said:
«People take mortgage loans devastate credit cards, open lines of credit secured by the property, and all just in order to buy bitcoins… But it is not something that should be invested in the guy who earns $100,000 a year, has a mortgage loan and which has two children in College».
As President of the North American Association of securities administrators (NASAA) and Director of the securities Commission of Alabama, Borg has a wealth of experience. And even the most desperate cryptomnesia recognize that we can’t risk to bet on bitcoin all that they have.
«Now you are on the curve of excitement. At some point in time there will be alignment,» said Borg on the TV channel CNBC.
This year was the bitcoin real test where it proved its exceptional stamina, no problem «flicking» on the way up negative news — for example, the closure of cryptocurrency exchanges in China. However, it is possible that a significant event, such as the adoption of regulatory cryptocurrency laws in the United States or South Korea could lead to a sharp drop in prices.
And although the volatility of bitcoin is a bit softer than in the early days, however, beginners have no experience of coping with a bearish market. Cryptocurrency fluctuates greatly, and therefore, like any asset, it is probable that downward movement. Those who pledged their property and profit from the growth of bitcoin, are the chances of success, however not all come out winners.
Many supporters of bitcoin believe that bitcoin is a «killer banks». It would be very ironic if the growth of digital currency — and the subsequent drop — spoil banks life because of the credit boom, caused by bitcoin.