TLDR : Between February and June of this year, I took out $35,000 in unsecured personal loans with an average fixed APR 5.5%. I boughtt 1.7 BTC at a cost basis of ~$20,500. I've since paid off $8,000 of the loan and currently owe $27,000. Even though I'm down ~17% on my investment (not including interest), I'm not stressing and my conviction remains strong. I can easily afford to service the debt.*
And, here is my 6 month update...
How it started....
Two unsecured, fixed APR personal loans for $35,000 total.
First loan was February 2022 for $15,000 with a 6% fixed APR and a monthly payment of $225 on a 84 month payment plan. I bought 0.45 BTC with a cost basis of ~$34k.
The second loan was in late June for $20,000 with a 4.9% fixed APR and a monthly payment of $326 and a 72 month payment plan (In the original post I said my APR was 4.5%. That was a typo, it's actually 4.9%). From this loan, I eventually ended up with 1.25 BTC with a cost basis ~$16k.
Total Amount of Bitcoin: 1.7 BTC
Total Cost Basis: $20,500
With Bitcoin trading at ~$17,000 that puts me currently at -17% on my investment.
Current amount owed: $27,000. I've managed to pay off $8,000 so far.
Original total monthly payment to service the loan: $551. However, since I've paid off so much in such a short amount of time, they've lowered my monthly payments from $551 to $480
How it's going?
I'm doing fine. I've been laser focused on paying off the loan as quickly as possible. I managed to pay off more than I thought I would by now, ~$8,000. Making the monthly payments has a been a non-issue. I'm thinking I'll be able to pay off another $12k-15k in 2023 or more. We'll see...
I'm not upset with my cost basis either. It would have been much higher were it not for a good trade during the late summer rally. I originally had a higher cost basis like $19,500 for the Bitcoin I bought with my second loan. However, I did what I said I would not do: I sold it at in early August for just over $23,000. I held on to the cash for a good two months, and then bought back at a lower price in October-November.
I know I said I wouldn't trade, but I just couldn't believe this past summer rally. It was too obvious a suckers rally. Bitcoin ended up going over $24,000 so I'm happy I got close to the top. I know, I know. I shouldn't have traded but I did and it worked out this time thankfully;-)Moving forward, I'm going to continue stacking sats and paying down my loan.
This is meant to be a long term hold for me, 5-10 years, if not longer. I took out a loan that I can easily afford to service, so it doesn't matter what happens in the market.
Nothing has changed in my view of Bitcoin. In fact, since the collapse of FTX and all the others, my conviction in Bitcoin has only grown stronger. I keep everything in cold storage now. I can't imagine ever touching another alt coin or holding my coins on an exchange ever again...