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Three years ago, one Reddit user made a high-risk decision: they borrowed $150,000 using a mix of personal loans and 0% APR credit card balance transfers to buy Bitcoin.
As of June 4, they say that investment is paying off in a big way.
The investor says they now own 4.75 Bitcoin, purchased at an average price of $35,000. With Bitcoin trading at around $105,000 at the time of the update, their holdings are worth roughly $498,750. After accounting for the $15,000 in interest paid and the original $150,000 in loans, they’re sitting on an unrealized gain of over $330,000.
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“I have no plans to sell any of it. Just buy and hold. Retire early,” they wrote. The remaining debt, now at about $40,000, comes from credit card balance transfers that carry 0% interest for the next six to 12 months.
They admitted to recently taking out another $25,000 balance transfer to buy an additional 0.25 BTC when the price crossed $100,000, despite previously promising not to borrow more. “I was down to just $20,000 remaining balance, but I simply couldn’t resist.”
When asked why they didn’t just use earned income to slowly invest, the investor explained, “If I only did that, then I would not have been able to buy nearly as much Bitcoin as I did at the lowest prices.”
They describe their approach as a “reverse dollar-cost averaging.” Instead of buying a little over time, they borrowed a lump sum when BTC was trading between $16,000 and $35,000, then repaid it in monthly installments.
To critics who say borrowing to invest is reckless, they responded, “Taking out loans to buy assets is fine, so long as you can afford to responsibly service the debt. Just don’t take out loans to buy liabilities.”
They argue that inflationary U.S. fiscal policy will continue to devalue the dollar. Their thesis: borrow in USD and buy an appreciating asset like Bitcoin. “The strategy is basically a speculative attack on the U.S. dollar,” they said.
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That was the number one question in the comment section.
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