Slowly making my way through the “established” news outlets covering cryptocurrency reveals an often-espoused conviction: that investors in this space are unintelligent and do not understand what they are investing in.
Is it true? At first glance, wild price swings alone might suggest an obvious reason to believe that it is. The accompanying narrative might go something like this: these foolish “investors” are all just looking for the greater fools, and at the slightest notion that the house of cards will fall they all run to the door. The narrative appears to offer an explanation for the wild price swings, but I’m not convinced the proposed explanation is the truth. Be skeptical that anyone just glancing can “call it like they see it” when it comes to something that’s never been seen before.
I’m going to list a few reasons why I don’t think cryptocurrency investors deserve these negative generalizations. I invite you to consider my observations, do your own research, and learn to be critical of these “traditional” news outlets covering something they may not yet understand.
What Kinds of People
Invest in Cryptocurrency?
Cryptocurrency Investors are: Idealists
The crypto market is still very new and relatively small, and the idealism from which it first sprung has yet to become diluted beyond recognition. The further back in this market that you go, the more this is true – but it is still true today.
To be sure, people have always formed communities around anything for which there was a market – whether stocks, precious metals, livestock, or even… tulips. Investors of all kinds like to discuss potential profits and market movements; in this respect crypto investors are no different.
That similarity, however, may be hiding an important distinction between investors in the cryptocurrency markets and those in more traditional markets. The crypto investment communities abound with talk that centers around world change. The price is often viewed as an indicator of adoption and an increasing demand for the world-changing ideas that the blockchain and cryptocurrencies have made possible.
In most markets, price is the end of the discussion. In these new digital asset markets, price is much more often viewed as a means to an end that is far and away more idealistic than most traditional investors could readily relate to.
Cryptocurrency Investors are: Bold
These aren’t just bold new markets… these are bold investors in something new.
What other investors have to hear, day in and day out, that their investments are certainly in a bubble. They are told constantly that if they invest more, remain invested, or, even, have ever been invested in cryptocurrency – that they are clearly unintelligent.
They necessarily have to be bold to go against the strong and relentless barrage coming from the most respected bankers and traditional investors.
The cryptocurrency investors do not have decades of historical data that they can turn to for affirmation that things will turn out as they hope. Instead, they have charts and stories recounting sickening volatility. Their only consolation is their ideals.
No, “bold” is not just mislabeled stupidity – contrary to what certain powerful bankers might wish everyone believed. As a whole, these cryptocurrency investors aren’t stupid.
In fact, let me go one step further…
Cryptocurrency Investors are: Reasonably Intelligent
Let’s ignore the glaringly obvious fact that the largest holders of the top cryptocurrencies are often the early adopters – largely comprised of people with strong technological and mathematical backgrounds. Let’s go one step further and disregard the cryptographic prowess of these cryptocurrency designers, their contributors, and their debuggers – the vast majority of whom hodl investments in cryptocurrencies.
Let’s talk about the new money coming in. New investors have to be technologically literate, at the very least. These investments, after all, are digital assets – and computers are not optional. These potential investors can’t just pick up their phone and tell their bankers what they’re interested in. They have to take some initiative and research how to invest in cryptocurrency. In most cases, the next step is another decision: which exchange to use. Ok, so, then they decide.
After that, they need to make another decision. Which cryptocurrencies to invest in? Nearly every exchange has more than one.
If they can get this far – then they have made many decisions already and are literally sitting there, on their computer, with a web browser open in front of them. How could anyone imagine that at this critical moment, the moment just before the investors’ money will be exchanged for something – that these technologically literate people with initiative do not open a new tab and read about their imminent and most important investment choice?
We are all to believe that, instead, they close their eyes and click randomly. /sarcasm
“Alternative Set of Facts”
It would appear that most people investing in cryptocurrency are, bare minimum: idealistic, bold, technologically literate, and not afraid to take initiative.
The price swings are more than likely because they are intelligent, technologically literate, and acutely aware of what they have invested in. They have invested in something that threatens to upset the status quo – and sometimes that can result in backlashes much worse than bad press.
They have invested in something that threatens to upset the status quo…
Don’t just “glance”. Educate yourself. Get involved.