back to article Students: Duh, of course we're blowing our loan bucks on crypto coins

University students are opting to use their student loan money to invest in cryptocurrency, rather than school. This according to a survey this month from the Student Loan Report, which asked 1,000 college students in America if they had used their loan money to buy cryptocurrency, only to have 212 confirm. In other words, …

  1. ma1010 Silver badge
    Alert

    And they WILL get an education

    Once the bubble bursts, they will get a hard lesson about investing in things of questionable intrinsic value.

    The money was to be spent on getting an education, after all.

    1. Mark 85 Silver badge

      Re: And they WILL get an education

      That education they'll get from this is probably money better spent than on partying. Some will be smart and use any proceeds to payoff the loans. Others, who knows.. new car? Those that loose the money via this "investment" will also have something to show for it... discretion and thinking things through.

  2. JakeMS Silver badge
    Alert

    Careful

    While bitcoin does currently hold a strong value (or it did last I checked) investing right now is bad timing.

    A few years ago? Go ahead invest in it.

    But right now it's value is so high that it's unlikely to significantly rise in the future, if anything there is now a very high risk of losing their money instead of getting more back.

    Even more so now that many countries are trying to stop bitcoin, some companies are blocking ads for it, and there's a heap of bad press for it recently. All of this will either result in a lower value, or worse already has.

    You have to remember with investment, a single news article can cause you to lose all your money. Investment is risky, and it always has been. So if you're going to do it you must invest in something solid and which is currently low value but expected to rise. That is unless you can afford the risk (which most students cannot).

    Right now, bitcoin is not that. If anything now is the time to sell, not buy.

    Ask yourself this before investing: The money you plan to invest, can you afford to lose it? If you lost every penny would it effect you? This is the risk you take when investing.

    I wouldn't suggest that someone invested in bitcoin right now unless they actually intended to use the coins to be honest.

    Just my 2btc.

    1. chivo243 Silver badge

      Re: Careful

      @Jake?MS

      Ask yourself this before investing: The money you plan to invest, can you afford to lose it? If you lost every penny would it effect you? This is the risk you take when investing.

      I posted this a few weeks ago, seems even more appropriate for this article...

      Kipling's advice to crypto miners~

      If you can make one heap of all your winnings

      And risk it on one turn of pitch-and-toss,

      And lose, and start again at your beginnings

      And never breathe a word about your loss

      Now I have a Kingston Trio song stuck in my head too....

    2. DougS Silver badge

      Re: Careful

      Easy to say "go ahead and invest in it" a few years ago in hindsight. If bitcoin was $100,000 in 2021 you'd probably say the same thing then I guess?

      If they are only putting in say $1000 worth then it isn't a huge loss and might as others suggest be worth it from an educational standpoint (well it would be if they end up losing money, if they make money it will probably teach them the wrong lesson and they'll jump on the next bubble all that much harder)

      I'm sure a few have probably taken out the maximum sized loans they could and put all the excess into bitcoin, thinking that if it went from $1000 to $10,000, it will go from $10,000 to $100,000 and they'll use the proceeds to pay off their loans.

    3. ' DROP TABLE users;

      Re: Careful

      My crystal ball is faulty, next weeks lotto numbers please.

    4. intrigid

      Re: Careful

      "Not that I disagree with what you said, but people said the same thing a few years ago!"

      Yep. Everyone was saying the exact same thing when it shot up from $16 to $40 in the span of a day. Forget it, it's too late, you missed the boat, etc.

      Despite all the talk of restrictions, there's just as much, if not more talk about nations issuing their own cryptos.

      World circulating currency is about $80 trillion worth. If cryptocurrencies achieve just 50% of that market share, then investing just $10,000 today will make you a millionaire.

      1. LucreLout Silver badge

        Re: Careful

        World circulating currency is about $80 trillion worth. If cryptocurrencies achieve just 50% of that market share, then investing just $10,000 today will make you a millionaire.

        Which value of M did you use for that? As far as I can tell none of the classic considerations of money fit your numbers - the closest I can get is USD 90 Tn, but using that measure as a comparisson to BTC is wildly ignorant of what money is and how it works I'm afraid.

        Certainly crypto is not going to hit 50% of any type of money and absolutely not any of the none nation state backed coins out there today.

        Speculate on BTC if you wish, just please do so understanding the difference between investment, speculation, and gambling, and do it from an educated position rather than a hypecycle wake.

    5. Anonymous Coward
      Anonymous Coward

      Re: Careful

      When leaving education with a huge debt no one can pay off any time soon - a few G on top feels like nothing. And if it turns out a winner - goodbye debt!

      You would be foolish not to.

    6. LucreLout Silver badge

      Re: Careful

      Ask yourself this before investing: The money you plan to invest, can you afford to lose it? If you lost every penny would it effect you? This is the risk you take when investing.

      Most of your post I agree with, but the above is very wrong.

      Investing is risky, yes, but you can spread your risk with a balanced portfolio of asset classes and assets within each class.

      Investing all your money in Lloyds shares a dacade ago would have been a car crash, but you'd still not have lost it all. Investing your money in 10-20 FTSE100 companies in differing market segments would be risky, but you'd be unlikely to lose more than 30% of your investment even in a market crash.

      Risk & reward are finely balanced. BTC investment is a classic example of FX speculation, rather than investment. You're selling GBP/USD/Whatever and buying BTC in the hope that the rate of exchange moves in your favour. As there's no financial imperative backing the transaction (you don't need BTC to spend) and there's no commercial basis for the transaction (you earn in BTC and spend in USD for example) it becomes speculation rather than investment. The difference is important.

  3. ratfox Silver badge
    Trollface

    Investing right now is bad timing.

    A few years ago? Go ahead invest in it.

    Not that I disagree with what you said, but people said the same thing a few years ago!

    1. MiguelC Silver badge

      As always, hindsight is 20-20

  4. Androgynous Cupboard Silver badge

    Investing?

    Interesting choice of verb. Personally I'll be investing in roulette. On red, in fact.

    1. DropBear Silver badge
      Devil

      Re: Investing?

      Excellent strategy! Just make sure to double your next bet every time you lose and you're sure to come out on top!

      Sincerely yours,

      Martin G. Ale

    2. Mark 65 Silver badge

      Re: Investing?

      I'd also question the use of the term "investing". "Punting" perhaps, "gambling" maybe, but not "investing".

  5. Anonymous Coward
    Anonymous Coward

    It was the fault of the government.

    For passing the Unlawful Internet Gambling Enforcement Act in 2006, and enforcing it in full in 2011, so that Americans couldn't play online poker any more.

    Those kids who are gambling on cryptocurrency should be winning at poker instead. (Or, conversely, losing - in which case they'd have been losing at least some of their money to me.)

  6. Gio Ciampa

    Nothing changes...

    Most of my student friends (back in the day) invested their grant money in British Gas et al...

    ...sold the shares as soon as they were allowed... and (mostly) bought some half-decent audio gear with the proceeds.

    Admittedly, that was a lot more likely to be a guaranteed win than the likes of Bitcoin today.

  7. Packet
  8. Eddy Ito Silver badge

    Have no fear, I'm sure that of all the kids whinging to Senators Warren and Sanders about getting a gov't bailout for their student loans not a single one spent so much as a penny on any form of cryptocoins.

  9. CentralCoasty
    Pint

    What has become of students!

    I dont get it...

    I am sooooo confused.

    I thought when you were a student there were only two things you thought about... sex and beer (not necessarily in that order)... so the usage of money generally involved acquiring one of those things with the intent to acquire the other.....

    I guess times are a-changing......

    1. Mark 65 Silver badge

      Re: What has become of students!

      Well, they have a good chance of getting fucked...albeit financially. That will then likely lead to consumption of alcohol to drown sorrows. Fait accompli.

  10. Gustavo Fring
    Trollface

    The really clever students

    are buying the money making machines eg cypto mining rigs .. 5 grand or so for a small 6 card rig and they can be making profits of a few dollars per day .. and if they can filch the leccy somehow . Course the ROI and the bios tuning and the restarts and 24/7 running WILL teach them a lot, as will the bills at the end of the year. But at least they will get to take home two very beefy gfx cards and a portion of VeniceCoin's.

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