Saturday, March 24, 2018

In a roundabout way, the U.S. government is subsidizing cryptocurrency buying as college students use loans to buy Bitcoin

We already know from past news reports that many college students use their loans for things other than education such as paying for spring break vacations, car payments, and buying iPhones.  But a new study out on March 23 shows that upwards of 20% of these students are also using that money to buy Bitcoin and other cryptocurrencies.

The irony of course is that over 90% of all student loans are underwritten by the U.S. government (Sallie Mae), which means Washington is inadvertently subsidizing the buying of cryptocurrencies.

Chart courtesy of The Student Loan Report
Founder of the Student Loan Report, Drew Cloud, explained, “Younger Americans are certainly the most enthusiastic about cryptocurrency; they are the most active investors and want to get involved in the space in any way possible. However, I truly thought the percentage would be lower. As a college student, your budget is thin and that extra money could be used on rent, groceries, or books,” he told the Boston Globe
The survey “found that 21.2 percent of current college students with student loan debt have used financial aid money to fund a cryptocurrency investment,” the study found. Over four days students with debt were asked one question about buying cryptocurrency with loan money, and over one-fifth responded in the affirmative. – Bitcoin News
With an estimated 40% of students expected to default on their loans over the next 10 years, if the government should one day vote to forgive these debts would they also now inadvertently be providing a bailout to the cryptocurrency sector as well?

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