One of the first pieces of advice offered to budding cryptocurrency investors is usually “don’t invest more than you can afford to lose”. Such a warning seems perfectly reasonable in a market that can drop more than 60% in a matter of weeks. However, according to research done by The Student Loan Report, some students are using money that doesn’t even belong to them – their loans.
A Fifth of Students Have Bought Cryptocurrency with Their Loans
Student loans have a something of a history of being misused. After a fair portion of it has been spent on the course itself and somewhere to live, the rest is kept by the student to cover their day to day expenses. This usually entails a fair amount of partying and a hell of a lot of instant noodles.
It seems that today’s students are a little more financially savvy than those who went before them though. The Student Loan Report has taken a survey of 1,000 college students. The survey was taken by online polling specialists, Poll Fish.
Over a four day period starting on March 16, 2018, they asked participants the question: “Have you ever used student loan money to invest in cryptocurrencies like Bitcoin?” Interestingly, the results state that over a fifth of those asked had done.
Whilst using money that you will one day have to pay back to invest in as volatile a market as cryptocurrencies might seem like absolute madness on paper, the survey doesn’t give any indication to what level the students had got involved, or whether in fact they had sold or continued to hold onto their investments.
The Boston Globe points out that the market has declined from its all-time highs, “making big losers of many who bought in late.” This seems harsh as there is nothing to suggest that any of the student investors have sold their holdings and therefore lost anything at all.
Unless the students buying into crypto were after a seriously quick buck, it would be folly for them to sell their holdings any time before they had to pay the loan itself back. For all the publication knows, those buying in could be making a long-term play and have only invested money that was in excess of their own living expenses. If this is the case, their decision makes great financial sense and is unlikely to have been taken with any serious life-changing amount of money.
Whilst some of the later 2017 buyers might well be sitting on bags at the moment, if they understand what they’ve bought into, they’ll be playing a longer game. Super bullish price predictions like those of Tommy Lee and John McAfee will no doubt make the waiting game much easier for them too.
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