Previously we wrote about the pros and cons of the rapidly expanding cryptocurrency market.
One of our conclusions was that since the market was bullish with no underlying value, the potential for investors to invest with other-peoples-money was high. This new report suggests that the percentage of bitcoin investors borrowing to fuel the market could be as high as 20% making a correction almost inevitable.
According to LendEDU, a personal loan research firm, more than 18 percent of Bitcoin investors have used borrowed money to trade the cryptocurrency. In a global survey of 672 active Bitcoin investors, researchers asked traders the method they used to fund their cryptocurrency trading accounts. The majority of investors used banking systems such as credit cards and ACH transfers to fund their accounts.
But 22 percent of traders revealed that they have not paid off their credit and debit cards after purchasing Bitcoin, effectively investing in the cryptocurrency with borrowed money.