Bitcoin (BTC USD): Why New Investors Buy Cryptocurrencies Despite High Prices

Russia's Largest Bitcoin Mine Is Turning Water Into Cash

Photographer: Andrey Rudakov / Bloomberg

They see stories of newly minted Bitcoin millionaires. They are offered a small amount of free crypto. And they’re watching mainstream financial companies come up with the idea of ​​investing in digital currencies.

Now, rookie investors say they buy the cryptocurrency to get involved in the act and not feel left behind. Like the digital currency dances nearly $ 40,000, those investors are becoming more comfortable sinking a small portion of their extra money into something that is once seen as scarce and risky.

Amber Wells, 23, of Atlanta, remembers hearing about Bitcoin years ago when it was relatively cheap, but didn’t buy it at the time.

“All of a sudden, I hear people say, ‘I’m a millionaire now!’ and I’m like, ‘Oh my God, literally I could have been you,’ “he said. On Thursday, Bitcoin bought on Cash App – a cash transfer service developed by Square Inc. – and established a recurring purchase of $ 20 a week.

“I didn’t do too much research. I thought, ‘Let me get in there any way I can,’ ”he said. “I just wanted to be a part of it.”

The Bitcoin price surge in 2020 came at the end of a strange year, when many people started trading stocks on their own – taking advantage of non-commissioned trades – and the average American household had more money on hand than usual. Stock markets also hit record highs after one of the worst accidents in history. The trend has extended into this year, with Bitcoin peaking at nearly $ 42,000 earlier in January.

Read more: The Bitcoin Comeback – Is Crypto finally going mainstream?

The revival of the digital currency led to Khadijah Suleman, 27, buying $ 300 of Bitcoin on January 11. The manager and social media entrepreneur in Los Angeles said she had been watching crypto for a while but was too scared to enter in December. , rapper Megan Thee Stallion did a Bitcoin gifts on Twitter, and a friend said she had invested, so Suleman decided to make the jump. She actually hopes that the price will drop so she can buy more.

“I know it’s really dangerous,” he said. “But you never know until you play with it and figure it out, so I’m going to keep investing incrementally.”

Israel-British investment platform eToro Ltd. says saw more than 530,000 new registrations in the first 17 days of 2021. To date, the platform has seen over 100% growth in new users invested in crypto as their first act compared to 2020 and 55 % growth compared to 2019.

The outburst has led to blatant warnings from financial regulators and banks. The UK’s financial watchdog said this month that people who buy crypto or invest in affiliated companies “should be prepared to do so lost all their money. ”And last week, UBS felt the need to remind clients Bitcoin is extremely risky and could go to nothing, calling the names Myspace and Netscape.

About New Bitcoin Investors Explain Why They Buy At Record Prices

For years, cryptocurrencies have been the background noise for most everyday investors – it was seen as an asset that attracted hackers, criminals and people with money to burn.

Last year, however, large US financial institutions began to incorporate it into their operations. Suddenly people were able to buy and sell things with them Bitcoin on Paypal, Fidelity Investments created a Bitcoin fund and announced Coinbase’s crypto trading platform it plans to go public, apparently taking its place with mainstream financial companies.

Some financial advisers say they would feel comfortable with them clients put as much as 5% of their investments in crypto.

“Many of my friends are starting to invest in Bitcoin,” said Will Scott, 23, of Bowling Green, Kentucky. “I hadn’t put that much thought into it. In the long run, it’s a little more about financial responsibility than a specific goal with earnings. “