The cryptocurrency market is booming, attracting hundreds of thousands of new investors in the US, but with loads of potential risks.
According to the Washington Post, Brian Carderalla – the founder of a technology consulting firm – became a millionaire within a few days in early May. Earlier this year, he spent tens of thousands of dollars to buy Dogecoin and by mid-May, the value of the investment your thoughts skyrocketed 1 million USD.
Cryptocurrency markets rocked by Tesla CEO Elon Musk’s tweets last week and Dogecoin’s price drop from peak 0.74 USD/dong down 0.49 USD/copper. Even so, Carderalla’s investment is still worth hundreds of thousands of dollars. “It was like a roller coaster ride,” Carderalla describes.
It is estimated that there are nearly 10,000 cryptocurrencies on the market today. A series of trading websites have sprung up, allowing investors to buy and sell cryptocurrencies and keep an eye on the market movements. At a time when hundreds of millions of Americans are stuck at home because of the Covid-19 pandemic, the crypto investment craze is spreading.
There are almost 10,000 cryptocurrencies on the market today. Photo: Getty.
“I wouldn’t be surprised if a lot of people have only one investment channel, which is crypto,” Cardarella asserted.
In May, the cryptocurrency market was constantly shaken. The first is that the tweets of Tesla CEO Elon Musk make Bitcoin price and Dogecoin plummeted. Next came the new cryptocurrency Internet Computer appearing and immediately reaching market capitalization 40 billion USD.
Despite the recent drop, the total market capitalization of the entire cryptocurrency market is still up about 40% over the past 3 months, to 2 trillion USD.
Apps like Robinhood and Coinbase offer a variety of cryptocurrencies to investors. They can easily exchange them for cash. Financial experts say that the inability of Americans to go to entertainment venues, casinos and thousands of dollars more in bailouts makes the investment fever in cryptocurrencies even hotter.
Many people choose cryptocurrencies as their sole investment. Photo: Reuters.
On Twitter, Nick Maggiolli, CEO of Ritholtz Wealth Management, very clearly describes the violent growth of the cryptocurrency market. If an American received 3 bailouts in April, December last year and March this year and spent all to buy Dogecoin, this person now owns a fortune of about 500,000 USD.
“People saw the price of cryptocurrencies skyrocket, friends and relatives flocked to invest. They are afraid of missing out and want to enter the market,” explained James Putra, Vice President of TradeStation Crypto.
“When people all over the country stay at home, they will find a way to pass the time. There are people who have never invested in stocks, now tell me about cryptocurrency price charts,” said Putra.
Bitcoin price is stabilizing at $45,000/dong after a series of days of sharp declines due to the tweets of Tesla CEO Elon Musk. Photo: CoinDesk.
Of course, the craze is not limited to the US but is a global phenomenon. Many new investors see cryptocurrencies as a life-changing opportunity. “I’m paying a tax rate that I wouldn’t be able to reach in my whole life on salary alone,” said Christopher Hansson, 29, from Sweden. He used to work in retail.
“A lot of people made huge amounts of money from the early stages of the Internet, and I think cryptocurrency is Internet 2.0,” he emphasized. Hansson buy 15,000 USD cryptocurrency since 2017 and now own hundreds of thousands of dollars. “Now I have the opportunity to be financially independent,” he said.
Professor Angela Walch of the University of St. Mary believes that there are many factors behind the crypto craze, including the Covid-19 pandemic and massive economic stimulus packages. “Investors can win big. And investors also see an investment in cryptocurrencies as entertainment value. They have a chance to win big,” said Professor Walch.
According to the Zing/Washington Post
More than 19,000 Bitcoins were silently sold before being “dumped” by Elon Musk
Two experts analyzing virtual currency data simultaneously made anomalous findings about Bitcoin trading right before and after Elon Musk’s tweets.