Cryptoverse: Young HODLers keep bitcoin in balance
Bitcoin is known to freak out when Elon Musk tweets a broken heart emoji. So why doesn’t it fly away when we seem to be standing on the precipice of World War III?
This could be partly due to new HODLers.
Young retail investors betting on bitcoin as a long-term proposition rather than for quick wins are joining the ranks of these true believers, whose name emerged years ago from a trader misspelling “hold” on a online forum.
This trend could help stabilize the notoriously volatile crypto market and potentially provide a long-term floor, according to some market watchers who point out that bitcoin is up around 5% from before the Russian invasion.
A study by multi-asset retail investment platform eToro, which claims to have millions of users, found that people between the ages of 18 and 34 were far more likely to invest in crypto than they were. anyone else, 66% of this age bracket owning bitcoins and other digital goods. currencies. That’s up from 46% last July.
Perhaps more tellingly, more than a third of those invested in crypto said they believe in its long-term value as a “transformative asset class.”
Callie Cox, investment analyst at eToro in the US, described these people as “HODLers in a nutshell”.
“People who believe in technology will be less likely to sell when scary headlines cross the tape,” she said, adding that she expected to see more retail investors buying future price dips. of cryptography.
While eToro’s survey of 8,000 investors only provides a snapshot, the results match other platforms. Crypto exchange Currency.com says 31% of its customers are between the ages of 23 and 30, and 20% between the ages of 18 and 20, for example, while another exchange, Busha, says its average trader is between 18 and 40 years old.
Larissa Bundziak characterizes the young HODLer.
“I don’t think crypto is a get-rich-quick scheme. That’s not the whole story,” said the 28-year-old U.S.-based Ukrainian PR professional.
She saw her bitcoin investment grow from $19,000 at the end of 2017 to almost $3,000 in January 2019, but said she “kept investing money and then all of a sudden it went to 60 000 dollars”. She plans to continue to increase her holdings.
“It’s about being able to send it how and when I want, to my family in Ukraine or wherever I want in the world, and not having money made by a bank or a third party where I don’t know. not what’s going on. keep it up,” she said.
EXPECT THE UNEXPECTED
Any doubts that the retail trader could be a powerful and annoying force in the financial markets were dispelled last year when hordes of retail investors propelled “meme stocks” such as GameStop to dizzying heights.
For bitcoin, a growing cohort of retail investors looking for the long term could compound the stabilizing effect of long-term investors also doubling their cryptocurrency reserves.
As Russian troops advanced into Ukraine on February 24, bitcoin initially fell 14% to around $34,000. It has, however, increased by 15% since then.
That seems relatively soft for an asset prone to wild and unpredictable swings over the years. But beware: if bitcoin has taught us anything, it’s to expect the unexpected.
Musk seems to have a special power; bitcoin fell 35% in May last year after it said Tesla would no longer accept cryptocurrency for car purchases; he fell back in June after posting “#Bitcoin,” a heartbroken emoji and a photo of a couple discussing a breakup.
PROFILE OF A CRYPTO TRADER
Another demographic trend in the crypto market is also coming into focus: traders are biasing men.
The eToro survey showed that 38% of male investors own cryptos, for example, compared to just 19% of female investors.
A survey by US broker Robinhood found that 41% of female investors said they had never invested and would never invest in crypto, compared to 24% of male investors.
“The investing gender skill gap is real and it persists even though there was a lot of retail interest and involvement in the crypto market last year” said Christine Wood, COO of Robinhood’s crypto business.
There could be various reasons for male inclination, market participants say.
“Crypto is at the intersection of finance and technology, which in themselves are male-dominated industries,” said Ophelia Snyder, co-founder of Swiss crypto commodity provider 21Shares & Amun Tokens.
(Reporting by Lisa Mattackal and Medha Singh in Bengaluru, Alun John in Hong Kong; Editing by Vidya Ranganathan and Pravin Char)