In debt with Bitcoin
Are people putting their houses for mortgage in order to buy Bitcoin?
It is a worrying trend, as these decisions are foolhardy to say the least, but moreso, they are dangerous — as they have preceded other bubbles in the past.
While the product (dot com sites, or housing) is not necessarily bubble-prone, the way in which people react to it can cause a pop. Bitcoin is a speculative market, and it is in a feeding frenzy at the moment as people try and get in on the wild ride. But moves like buying Bitcoin in debt could lead to a catastrophic end for the currency.
Bitcoin and the culture surrounding it has triggered a lot of greed, with incredible stories of wealth and profit, and that’s fuelling the latest trend of individual adoption.
Angela Walch, a law professor at St. Mary’s University in Texas who studies cryptocurrency and financial stability, spoke to Vice about the speculative nature of Bitcoin and its potential to turn into a bubble if silly decisions keep flourishing.
Some of the factors to consider when trying to find a potential bubble are already evident according to Walch:
“Some of the hallmarks to me involve the FOMO idea—the fear of missing out and never being able to get in. People see other people making a lot of money and they just want in on it. The housing bubble is a good example of that. People thought another person would always want to buy their house from them at a higher price.”
Don’t put your house on it.
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