Bitcoin trend: After a new record high: Why small investors now dare to get started with Bitcoin | message
Forex in this article
Bitcoin with a new record high
Small investors want to participate in the phenomenon
Social networks encourage runners
Bitcoin course benefits: Crisis attracts private investors to the markets
After the coronavirus spread around the world for the first time last year and caused fatal slumps in the financial markets, the crisis drove a large number of small investors to the stock markets who had previously had little or no trading experience. Modern and simplified apps such as Robinhood are intended to enable private individuals to easily enter the world of finance. But even aside from company shares, the willingness of inexperienced traders to invest increased, as reported by the Bloomberg news agency. Cryptocurrencies were a particularly popular asset last year – above all the most popular digital coin, Bitcoin. With an equivalent of US $ 48,003.72, the coin reached a new record high on February 9, 2021 via CoinMarketCap. In December, a unit of the cryptocurrency was at times just under half. The price rose significantly last year after more and more established institutions spoke out in favor of digital currencies. In 2020, the payment service provider PayPal announced that it would also be able to use crypto currencies in the future. The crypto exchange Coinbase is also currently planning an IPO. Many financial advisors also advise their clients to put about five percent of their portfolios in digital currencies, according to Bloomberg.
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“Fear of missing out” drives crypto demand
Despite new record highs, entry into the crypto veteran is more popular than ever among private individuals. For example, Blomberg reports on 23-year-old Amber Wells from the US state of Atlanta, who already toyed with the idea of investing in the coin a few years ago, but then decided against it. “All of a sudden I hear people say, ‘I’m a millionaire now!’ and I think, ‘Oh my god, that could have been me,’ “Wells is quoted as saying by the news agency. Now she has dared to get started with the cash app developed by Square and has a standing order every week debiting a value of 20 US dollars from her account and investing in the crypto currency. In doing so, she admitted that she had not read the subject very carefully. “I didn’t do too much research. I just thought, ‘I just want to be there, no matter how’.” This phenomenon is also known by market experts as “fear of missing out”, ie the fear of missing out on an important event. Providers such as Cash or the Israeli-British platform eToro are currently benefiting from this. According to Bloomberg, more than 530,000 new users should have registered for the broker in the first 17 days of the new year.
Influence of social networks on the courses
Wells was also heavily influenced by social networks, as she explained to Bloomberg. A prominent example of this influence is Grammy-nominated American rapper Megan Thee Stallion. She only recently entered into a partnership with Cash, under which she gave away Bitcoin worth 1 million US dollars to her fans in December via her Twitter account, according to the crypto portal Decrypt. To redeem the free coins, their followers needed the cash app.
The 27-year-old Khadijah Suleman felt the same way: the social media manager told Bloomberg that she had been watching cryptocurrencies for a while, but had not yet dared to invest herself. After friends told her about the rapper’s action, she dared to buy it and initially invested 300 US dollars. If the rate falls again, she wants to invest even higher amounts.
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Warning to inexperienced investors
However, Rosie Hooper of the Quilter asset manager warns against considering Bitcoin as an investment. “With increasing regulatory scrutiny, Bitcoin could simply become more and more difficult to access, and investors would simply be better off increasing their money over the long term through more traditional asset classes, where returns are less volatile and risk is reduced,” explains the Financial planner across from Bloomberg. “This is especially true for new and inexperienced investors.” The British financial regulator FCA also recently warned investors about the enormous risk involved in trading cryptocurrencies – especially if they have not made an informed investment decision. “When consumers invest in these types of products, they should be prepared to lose all of their money,” said the financial regulators. Investors should understand what they are actually investing in and the risks involved. Unrealistic, good return promises are a clear warning signal.
Finanzen.net editorial team
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