How Your Valuable Item Can Save You from the Crypto Crash
Cryptocurrency is taking over the world. Many people are using this type of digital currency as a way to get rich quick. And up until recently, it’s been working.
But a few weeks ago, all that changed. The market crashed causing millions of people to lose a substantial amount of the money they invested. Compounded with gas prices and inflation, it’s not a pretty scene.
If you are one of the many that was affected by the crypto crash, there is hope. If you have any items of value in your home, you can loan them to a pawn shop for a fast infusion of cash. And you don’t even have to give up the items you loan.
So how does all this work, you may wonder. Read on to find out.
What is Cryptocurrency?
The concept of cryptocurrency is a little difficult to grasp. It’s digital money that’s encrypted and decentralized. Unlike regular currency, there is no central authority regulating the market. Rather, the market is controlled by internet users that invest in it.
Cryptocurrency can be used to purchase just about anything, but many people use it to trade and invest. Individuals have earned significant income with this strategy, especially during the coronavirus lockdown when they were stuck at home and jobless. It gave them an additional form of income and an exciting activity to fill their days.
The transactions that happen on cryptocurrency are recorded on a blockchain. A blockchain is kind of like a virtual checkbook for cryptocurrency. It records transactions in blocks so a string of those transactions is considered a blockchain.
Everyone who uses cryptocurrency has access to the blockchain of their transactions. They are updated virtually as they take place.
There are a variety of cryptocurrencies available with some of the most popular being Bitcoin, Ethereum and Dogecoin. Like stocks, the currencies rise and dip in value. People buy low and sell high to bring in a profit.
Why Did Cryptocurrency Crash?
Cryptocurrency can rise and fall in value, and when it falls, there’s not much you can do but hang on and hope for the best. Investors recently lost a considerable amount when most currencies lost about 40% of their value just about 2 weeks ago in mid-May 2022. Since then, people have been praying for a rebound, but it seems as if, just when it looks like the sun is going to shine, there’s another dip.
This isn’t the first time crypto took a dive. It was also quite low in the middle of 2021. And now that we are gaining some insight, we can see how certain factors contribute to the storm. Here are some reasons why investors may be suffering.
Investors Have too Much Leverage
In the beginning of January, the world saw a sharp rise of people investing in crypto. Many investors use the debt they accrue to finance the purchase of futures which means they are hedging against future price drops of the coins they are investing in. This often spells for volatility. It causes prices to drop so people begin liquidating their assets which further fuels the fire.
And with lots of people selling, demand gets low so there’s little people can do other than hold on to their money and hope prices rise.
Mining is a process that involves making new currency and entering it into the market. It allows people to earn cryptocurrency without having to pay for it.
Miners receive cryptocurrency for completing blocks of transactions on the blockchain. They receive rewards for completing complex hashing puzzles. To mine, you need specific software like a graphics processing unit (GPU) or an application specific integrated circuit (ASIC).
China banned mining in June of 2021. This caused miners to move to mining-friendly jurisdictions. It also brought a decline in hash rates that allow miners to produce coins which lowers their prices.
Similar to regulatory disruptions, security breaches can also cause miners to slow down activities which lowers prices. Unlike stocks which are supported by a business, crypto is only worth as much as investors are willing to invest. When coins aren’t being produced, it makes it harder for them to find supplies.
While a lack of supply can increase demand and therefore, raise prices in other markets, it has the opposite effect in crypto.
Correlations with the Stock Market
Other than having a similar investment structure, the stock market and cryptocurrency are two entirely different beasts. Yet over the years, they have developed a close relationship.
Originally, it was thought that crypto would be an ideal hedge against interest rates and inflation. But as time goes on, experts are noticing that when the stock market takes a tumble, so does crypto.
There is no clear reason on why the two have become so closely integrated. It could simply be that investors get cold feet when they lose money and pull out of all investments. And there’s no doubt that the stock market has been suffering due to inflation, gas prices and the ongoing Russian attacks on Ukraine.
Influencers Cause Volatility
Because crypto value is only based on what people are willing to invest, financial influencers hold a lot of weight when it comes to market trends. For example, when Elon Musk decided to publicly endorse Dogecoin, the currency saw a considerable rise in value. If, on the other hand, influencers are saying discouraging things about the market, people could be looking to sell.
Correlation to Tech Stocks
Cryptocurrency may have a weak relationship with the stock market, but it has always been symbiotic with tech stocks. Tech stocks have been taking a dive lately with Nasdaq and Dow both closing at abdominally low percentages. As a result, even TerraUSD, a currency considered a stablecoin that offered a haven for investors in an unstable market collapsed.
What Can You Do If You Were Affected by the Crypto Crash?
Those that were affected by Crypto have little recourse in the market. If they sell what they have at the current low price point, they will lose any hope of gaining it back. They can only hold on and hope that prices rise again.
However, there are things people can do in their personal and professional lives to improve their financial situations. For instance, they can try getting a loan at a pawn shop.
How Does a Pawn Shop Loan Work?
Pawn shop loans are relatively simple. If you have an item of value, just bring it into a pawn shop. The salesperson will assess your item to see how much its worth. They will then offer you a loan that equals a portion of the item’s value.
If you agree to the loan amount, you will work out the terms with the company. You will be paying off the loan over a certain period with fees and interest.
Once you pay off the loan, you will get your item back. If you are unable to pay off the loan, the pawn shop will keep your item. But you will never have the unpaid amount go into collections or show up as an unfavorable mark on your credit.
And the best part of the whole process is, you’ll be able to walk out of the store with cash in hand.
Why a Pawn Shop Loan is Better Than a Bank Loan
If you are having financial troubles, any type of loan could be helpful. For instance, you could apply for a loan at your local bank. But here’s why a pawn shop loan is better.
No Requirements: A bank will want to see that you have good credit and steady income before they approve you for a loan. A pawn shop will only require that you have an item that’s sellable and you are good to go.
Quick Approvals: A bank will require a lot of paperwork which can take weeks or even months to process. With a pawn shop loan, you can walk out the same day with cash in hand.
No Credit Damage/ Collections: If you are unable to pay off a bank loan, it will damage your credit and go into collections, so you are hounded by collectors day and night. If you default on a pawn shop loan, you will lose the item you loaned, but it will never go into collections or show up as an unfavorable mark on your credit.
What Can I Loan to a Pawn Shop?
To qualify for a pawn shop loan, you will need to bring in a valuable item. Here are some examples of what a pawn shop may accept.
High end sporting good items
Firearms (registered to you)
Which Pawn Shop Should I Go To?
Getting a loan at a pawn shop can be a terrific experience, but beware. Not all pawn shops are created equal. There are some shops that offer lower interest rates and higher valuations than others.
If you are looking for a pawn shop to get a loan at in the South Florida area, Boca Raton Pawn stands out. We offer the highest valuations and the lowest interest rates around. Here are some reasons you should get a loan at our location.
High Valuations: We always assess items in the customer’s favor ensuring you get the highest price possible.
Low Interest Rates: Most pawn shop interest rates are through the roof. At Boca Raton Pawn, you’ll never pay more than 24% in APRs.
Long Term Loans: Pawn shops typically require you to pay off loans quickly, so you must make larger payments in a shorter amount of time. BRP offers loans that are as short as a day and as long as 10 years ensuring you are comfortable with your plan.
Private Appointments: At BRP, we understand that your finances are your business. That’s why we offer our customers private appointments. Call in advance to schedule if you would like to take advantage of this feature.
Why Else to Love BRP
BRP offers terrific deals on loans, but that’s not the only reason you should check us out.
With so many people coming to us for loans and purchases, you can bet we are stocked with the finest luxury items. You can come to our shop to find the things you’ve always dreamed of owning. We offer great prices that are affordable for all budget points.
If you can’t come into our store, check out our website to order items delivered straight to your door.
We specialize in luxury goods, so we always have a vast selection. Our knowledgeable sales staff will ensure you are pleased with your purchase.
What Else You Should Know About BRP
If you are planning to come to our store for a loan, here are some things you should know about our company.
We Specialize in Luxury Goods: BRP specializes in luxury watches, handbags, and jewelry. Those are the items we carry, and they are the items we are most likely to provide loans for. We also favor certain designers. You can contact us in advance to find out if you are likely to get a loan for your item.
Bring Your Item in Top Shape: You will get a better price for your item if you bring it in in the best condition possible. Clean it and have small repairs made to ensure you get top dollar.
Bring Any Certificates or Receipts: We know your item is authentic, but not all our customers do. If you want your item to get a good value, bring in any receipts, boxes, or certificates you have that prove its authenticity.
The crypto crash has gotten everyone concerned. A pawn shop loan can take some of the stress off your shoulders at this difficult time. Contact Boca Raton Pawn to get the highest valuations and lowest interest rates around. We look forward to serving you.