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Americans Burned Payday Loans and Credit Cards to Speculate on Digital Currency: Survey

Neil Campbell
Neil lives in Canada and writes about society and politics.
Published: July 4, 2022
22 percent of Americans took out high interest payday loans or burned through credit cards to gamble on the digital currency market, a survey shows.
A frightening number of Americans blew payday loans and burned through their credit cards to speculate on digital currency such as Bitcoin, Ethereum, and Dogecoin, a new survey shows. (Image: Masha Raymers via Pexels)

Almost 22 percent of Americans who have taken to gambling on the promise of meteoric returns in the digital currencies market have done so through borrowing money, and often at extremely high interest rates. 

In a June 22 article by Debt Hammer, the firm released the results of a survey conducted among 1,500+ Americans “to study their investing habits,” finding that although the majority of speculators have stayed away from the most dangerous kinds of leverage, a frightening proportion are playing with fire.


The survey was conducted from June 9 to 16, was composed of 18+ year-olds who responded via SurveyMonkey and the firm’s subscriber list, and all respondents reported an annual income of under $250,000.

Fifty-nine percent of all respondents were female, while the largest age demographic was 45 to 60-year-olds who comprised 37 percent of takers.

Asking respondents if they have ever “taken out a loan or used extra loan proceeds” to gamble on crypto, 78.63 percent responded in the negative. 

However, 15.3 percent said they’ve used a personal loan with an additional 4 to 6 percent of respondents admitting they’ve utilized any of a payday loan, title loan, home equity loan, their student loans, or refinancing their mortgages. 

Notably, 11 percent of respondents who said they’ve previously used a payday loan said they used the scheme to borrow, on average, between $500 and $1,000 to take a risk.

“Because payday loans average around 400% APR, this is a big-time gamble,” stated the article.

Losing habits

The consequences of the habit are both significant and prominent. Debt Hammer stated that 19 percent of respondents candidly revealed that “they’ve struggled to pay at least one bill due to the amount of money they’ve invested in cryptocurrency.”

Specifically, roughly 12 percent said they were worried about foreclosure, 6 percent were concerned about eviction, and almost 9 percent feared their car would soon be repossessed.

When measuring concerns among those who only borrowed money from payday loan sharks, the number of people concerned about foreclosure fell to 0.00 percent, while fear of having their car repossessed rose to almost 10 percent.

Although respondents showed more fiscal responsibility when it came to utilizing more serious forms of loans, crypto speculators were far looser with their credit cards. 

The number of people who said they’ve never used the method to purchase crypto fell to 63.85 percent. Among users, more than 20 percent said they paid the debt off right away, while almost 11 percent said they’re carrying a balance and “paying it off incrementally.”

Slightly more than 4 percent stated they’re relying on a promotional 0 percent APR to finance their bags. 

Among all 1,500+ respondents, 41.15 percent stated they had neither purchased any crypto nor had they considered doing so.

Among those who had, however, 54.25 percent said they had traded their funds for Bitcoin, 29.91 percent for Ethereum, and 34.85 for the memecoin Dogecoin.

Sentiments expressed in the survey appear to reflect the risk taken on by speculators. Among all respondents, only 51.33 percent stated they still felt cryptocurrency is a “good investment opportunity.”

That number jumped to 70.50 percent among those who borrowed money to pay for their bags, however. 

Self reported losses are notably scary, Debt Hammer stated, “Almost 5% of investors said they’ve lost $100,000 or more, while fewer than 1% say they’ve made that same amount.”

Overall, 59.91 percent of respondents admitted they’ve lost money, among which, 25.37 percent said they’d lost at least $1,000.

The most prominent reason reported by speculators for their gambling was that crypto prices fell sharply. 

It’s a notable development considering Bitcoin, which drives the entire digital currency market, fell to a low of approximately $17,750 in mid June, the first time in history the token has retraced below a previous cycle’s high.

In total, 40 percent gave either this reason or that they felt “cryptocurrency prices are historically low.”

As of time of writing, Bitcoin still trades above the high posted in its 2017 bubble cycle, however, after losing almost 30 percent during a one week fall from almost $30,000. 

Bitcoin has thus far failed to show further signs of strength or a willingness to recover to previous prices.

Nonetheless, data from blockchain analysis firm Glassnode shortly after the price crash showed that 13,000 new wallets containing at least 1.0 BTC had appeared, showing a large number of people still believed the token was worth as much as a vehicle even as a number of multi-billion dollar scandals hit the scene.

Trap door

Ordinary people have consistently taken the worst of their endeavors to get rich quick.

In April, a study published by the London Business School that utilized a unique reporting feature to track options trading data used by retail stock market speculators on gamified trading apps such as Robinhood revealed that ordinary people lost more than $5 billion USD, and all in the middle of the greatest bull run in stock market history.

Meanwhile, data released by the American Gaming Association in May revealed that U.S. gambling houses had their best first quarter in history in Q1 2022, taking more than $14 billion in revenue out of the pockets of gamblers.

The majority of the gains were from casino-based slots table games as Coronavirus Disease 2019 lockdown measures eased, in addition to all time highs in sports betting and iGaming.

And the news does not get better. Data posted in December of 2021 by analytics firm Chainalysis revealed that speculators had lost more than $8 billion to digital currency scams and hacks in 2021 alone.

In 2019, users lost $10 billion to scams and hacks.