Ethereum co-founder has warned his followers about taking personal loans to buy Ether or other cryptocurrencies
Ethereum co-founder, Vitalik Buterin, has warned his followers against taking personal loans to fund the purchase of Ether (ETH) or any other cryptocurrency for that matter. Buterin made this known yesterday via a tweet, addressing his one million followers on the social media platform.
Buterin tweeted, “Please don’t do things like this. I would NEVER recommend anyone take out a personal loan to buy ETH or other Ethereum assets”. He advised cryptocurrency investors and followers against using personal loans to buy cryptocurrency assets in hopes that they will make enough money to pay off the loan and earn extra money.
His advice comes despite cryptocurrencies appreciating in value over the past decade. Bitcoin and Ethereum have been particularly impressive so far this year and rising by over 150% since the start of 2020.
Despite the huge promises of cryptocurrencies, Buterin advises people to tread with caution. He revealed that seven years ago before he started Ethereum, he was worth a few thousand dollars. However, he sold half his bitcoins to ensure that he wouldn’t be broke if Bitcoin went to zero.
Ether and other cryptocurrencies have posted massive gains so far this year. However, the extremely volatile nature of cryptocurrencies makes them risky investment vehicles for most people. Cryptocurrency prices tend to swing high and low and it is difficult to identify price movements accurately. Bitcoin had been in a bearish mode since reaching the 2017 all-time high, and it took the cryptocurrency nearly three years to set a new all-time high.
Despite the massive rally by Ethereum so far this year, it is still a long way from its all-time high price of $1,432.
Buterin and other Ethereum developers have been working hard to launch Ethereum 2.0 and conclude the network’s migration to a Proof of Stake protocol. When launched, Ethereum would move away from a mining-based consensus to a staking consensus as the network aims to reduce power consumption on the blockchain.
The first stage of Ethereum 2.0 went live earlier this month. Ethereum 2.0 is defined as a generalised blockchain that would power decentralised computer-based applications. The Ethereum network would power various apps from iPhone games to government bonds and other assets in the financial markets.