Just recently the consumer group Lendedu released a report on bitcoin investors who use credit to purchase digital currencies. According to the survey, out of 672 active bitcoin investors polled, 18.15 percent of the participants used a credit card to fund bitcoin purchases.
Out of 672 Surveyed 18 Percent of Lendnedu’s Participants Use Credit Cards to Purchase Bitcoin
Last year’s consumer Nilson report detailed that the world’s outstanding credit card debt has accumulated to over $1 trillion and the debt continues to grow exponentially. With cryptocurrencies trending in popularity, it seems that many investors are purchasing bitcoin on borrowed money — credit cards and loans that bear interest. The consumer survey group, Lendedu, recently published a report that details that 18.15 percent of 672 bitcoin investors surveyed use credit to purchase their bitcoin.
“I used a credit card to fund and purchase,” explains the individuals in the survey who bought bitcoin in this manner.
22 Percent of the Borrowers Are Not Paying Off Their Debts
Lendedu believes the statistics are “quite concerning” as both combined debit and credit card purchases were used by more than half (51.78%) of the respondents. The reason the metrics are concerning the consumer group is because the size of the survey was relatively small compared to the millions of cryptocurrency investors. Furthermore, Lendedu revealed another metric which concerns them even more as the study states:
This was not even the most pressing concern coming from the LendEDU poll. That recognition belongs to this data-point: 22.13 percent of Bitcoin investors did not pay off their credit card balance after purchasing Bitcoin.
Of the 672 investors, 77.87 percent said, “I paid off my credit card balance after purchasing Bitcoin,” while the other 22.13 percent explained, “I did not pay off my credit card balance after purchasing Bitcoin.” However, not all the investors purchased bitcoin on borrowed money, as over 18 percent used ACH transfers, 13 percent used bank wires, and the rest of the respondents used other means of buying bitcoin.
Respondents Say “I Believe Owning Bitcoin Is Worth the Interest Expense”
Lendedu explains the results of the poll shows quite a few investors are not worried about bitcoin’s price volatility, and are willing to gamble returns from bitcoin will pay off credit card debt. “I believe owning bitcoin is worth the interest expense,” revealed over 70 percent of the respondents who used credit cards and interest-bearing loans.
“Additionally, 88.89 percent of that same pool of investors plan on paying off their credit card bill from the money generated after selling their Bitcoin,” explains Lendedu.
The recent survey shows the trend of borrowing money to purchase bitcoin and other digital assets has been growing. Further, just recently news.Bitcoin.com reported on the U.S. securities regulator, Joseph Borg, detailing that many Americans are taking out mortgages to fund their bitcoin investments. Borg says credit cards and equity loans are being used quite often these days to bet big on bitcoin paying off all the investors debts.
What do you think about people borrowing money to pay for bitcoin investments? Let us know your thoughts on this story in the comments below.
Images via Shutterstock, and Lendedu’s recent survey.
Bitcoin is a decentralized digital currency that enables near-instant, low-cost payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: transaction management and money issuance are carried out collectively by the network. Read all about it at wiki.Bitcoin.com.
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Author: Jamie Redman