Global Times: It’s time for young people to wake up to their dreams of riches in the “cryptocurrency world”

Will I be the next one to get rich? Wake up!

Global Times: It's time for young people to wake up to their dreams of riches in the "cryptocurrency world"

By Hu Bofeng, Special Correspondent of Global Times in India and the United States, Lin Ri, Global Times reporter Zhao Juejiao, Ji Dong, Ren Chong
Editor’s note: “It’s not an easy time to hold cryptocurrencies.” This may be the voice of many young people in the “cryptocurrency circle”. Over the past six months, a new wave of speculation has been launched around the world, and the cryptocurrency market, represented by Bitcoin, has surged all the way to the top of social media search lists at home and abroad. Faced with the pressure of employment, housing and marriage, some young people have rushed into this volatile and unregulated speculative market with the mentality of “getting rich overnight. According to Vox News, the cryptocurrency boom is not only a financial and technological phenomenon, but also a cultural and Internet phenomenon, behind which is the mentality of today’s young people who like to follow everything that is popular and their obsession with getting rich quick. This irrational investment behavior has led to the frequent occurrence of cryptocurrency scams, with some illegal groups using social media to publish false information and hype low-priced “torrents”, which is the cryptocurrency version of “The Wolf of Wall Street”.

Are cryptocurrencies accelerating into the mainstream?

It has been more than a decade since the birth of Bitcoin in 2009, and in recent years, the cryptocurrency market has received increasing attention from investors. Earlier this year, the price of cryptocurrencies suddenly skyrocketed due to multiple factors, including the new crown epidemic and the economic downturn. By mid-April, the price of Bitcoin hit a new high, and the prices of other cryptocurrencies (also known as “modal coins”, which refers to cryptocurrencies other than Bitcoin) also went up. Then, as many governments announced stricter regulations on cryptocurrencies, the price of bitcoin fell, and has now almost collapsed. This is a heavy blow to the most enthusiastic supporters of cryptocurrencies – young investors, according to the UK’s Daily Telegraph. But it can’t change young people’s perception of investing, which is that cryptocurrencies are accelerating into the mainstream.

According to Moneycontrol, a major Indian financial portal, young Indians are definitely the “backbone” of the cryptocurrency mania sweeping the world. Citing industry statistics, the site says that the majority of India’s 15 million investors are young people, with a total of 150 billion rupees ($13.1 billion) worth of cryptocurrency assets. WazirX, India’s largest cryptocurrency trading platform, found that from February to April this year, new registrations of investment customers over the age of 45 jumped 337 percent from the previous quarter, but investors in the under-30 age group remain the platform’s largest user base. PayPal, MasterCard and other companies that offer cryptocurrency transactions say the preference for cryptocurrencies among young Indian investors may stem from the millennials’ reliance on the Internet, “where they learn about investing in cryptocurrencies through platforms like Twitter and YouTube and lobby their elders to join them in the investment spree” .

In South Korea, cryptocurrencies are also quite popular with young investors. According to the “Virtual Property Transaction Management Program” released by the Korean government on May 28, the number of cryptocurrency investors in the country is 5.81 million, with a per capita investment of about 4 million won, based on statistics from the four major cryptocurrency exchanges in Korea. A survey conducted by Saramin, a Korean job portal, with 1,855 working people, found that 40.4% of the respondents invested in cryptocurrencies, and the age structure of people aged 30-40 accounted for nearly 50%. According to a survey conducted by another Korean job portal, “Part-time Job Paradise,” which targeted 1,750 college students, 52.9% of respondents were positive about the cryptocurrency investment boom. Among them, high yield is the main reason why college students are positive about the cryptocurrency boom, while some believe that the amount and method of cryptocurrency investment are low barriers to entry, and some even believe that it is the last chance to break the “class hierarchy”.

Young Americans have similar thoughts. According to the latest market report released by Gemini, the world’s first legally licensed digital currency exchange, the number of people holding cryptocurrencies in the U.S. will be about 28 percent in 2021, with about 63 percent expressing interest in cryptocurrencies. A survey of 3,000 people (aged 18-65) conducted by the exchange last November showed that those holding cryptocurrencies are widely distributed among the groups of men (74%), white people (71%) and young people under the age of 45 (77%). The market for cryptocurrencies in the U.S. is expected to grow from $1.6 billion in 2021 to $2.2 billion in 2026, according to a report by market research firm Markets and Markets.

U.S. magazine MEL says the number of cottage coins has grown exponentially since 2009, with the Bitcoin website estimating that there are about 5,098 cottage coins in circulation. Similar to penny stocks, cryptocurrencies are very cheap but highly volatile, giving investors the opportunity to get rich quick, and more than 25,000 “cryptocurrency” billionaires have benefited from this “gamble. According to the BitInfoCharts website, the continuous rise in bitcoin is creating millionaires at a pretty fast pace, on the books. As of today, 75,000 accounts worldwide hold at least $1 million worth of bitcoin, and 6,184 accounts hold more than $10 million worth of bitcoin.

However, Richard Flynn, U.K. managing director of Carlson Financial Group, is concerned that the boom in digital assets indicates that more young people are speculating than investing, and that “investors should understand that cryptocurrencies are as susceptible to supply and demand as any other asset, and that they are not backed by a fixed value.” Flynn emphasized that “cryptocurrencies are not ordinary commodities, much less legal tender, and do not fit into traditional investment portfolios.”

Will I be the next to get rich?

“It’s more like an informed gamble,” is how Sam, a 29-year-old cryptocurrency enthusiast, described cryptocurrencies to the Financial Times. Sam said that rising home and stock prices have made buying assets incredibly expensive for young people, and cryptocurrency is the only way young people like him can make serious money. In addition, the fact that knowledge of cryptocurrencies is more readily available from the Internet is one of the reasons Sam believes he is better suited to invest in bitcoin. According to the Financial Times, there is little chance of young investors making money in traditional finance, but cryptocurrencies offer the possibility of winning. Moreover, while regulators have slammed the proliferation of cryptocurrency-related content on social media platforms, it is an investment message being delivered by young people who lack formal financial education.

Chen, who was only introduced to bitcoin in 2020, said in an interview with the Global Times that he invested in bitcoin because he had seen frequent news of record-high prices for some time. “In a year’s time, the price of bitcoin rose from $10,000 to $60,000, so how could I miss such a money-making opportunity,” Chen said, adding that although he did not know much about blockchain and other technologies, he believed the price of bitcoin would still fluctuate upward. Chen also linked his investment in bitcoin to his upcoming graduation and job, “My seniors are earning just over $10,000 a month, and I’m guessing I’ll be earning about the same when I graduate next year, so how can I buy a house in a first-tier city with this salary if I don’t have support from home?” Chen said, whether it’s funds or stocks, he thinks it’s just “icing on the cake”, only bitcoin may let him “turn around” and live the life he wants.

The current interest in cryptocurrencies is driven by online hype, rising prices and a “fear of missing out” mentality, according to Kee Chan, an associate professor at the University of Sydney Business School. He said, “There are a lot of accounts on social media platforms of young investors showing off their wealth, showing off their brand new car or apartment, and they claim to have gotten rich by investing in bitcoin, and people see that and probably think that I’m next.”

In contrast, Cheng, who has a computer science degree and is working in Beijing, is more rational. Mr. Cheng has been investing in bitcoin for nearly seven years, and told the Global Times that he still holds nearly 200,000 yuan worth of bitcoin and ethereum. As he has been tracking cryptocurrencies for a long time, Mr. Cheng has come to see them as one of his primary means of investment. “If I were to rely on my salary alone, I would have to work for another 10 years to buy a house in Beijing, but buying bitcoin might only take two years, and no other investment is as fast as it is,” Cheng said, adding that he is not “all in” and still keeps some money in the bank to keep himself safe from the cryptocurrency market. He still has some money in the bank to keep himself out of trouble due to the volatility of the cryptocurrency market. Mr. Cheng admits that he knows there is a bubble in the cryptocurrency market, but he believes he will not be a “leek”.

Chen Bo, director of the Digital Finance Research Center at Central University of Finance and Economics, told the Global Times that the sudden new crown epidemic has had a significant impact on young people around the world, including China. “People are finding that income expectations are down, which can be seen in the relatively low consumption figures of various countries,” Chen Bo said, adding that in the eyes of some young people, cryptocurrencies such as bitcoin are innovative and can be “rich overnight” with huge fluctuations, which drives more people to invest in cryptocurrencies. More people are joining the ranks of cryptocurrency investors. However, according to Chen Bo, some young people who have used leverage to invest in bitcoin have recently suffered huge losses. He believes that many young investors are speculative and even have a “gambling” mentality, especially the post-95s and post-00s. For them, Internet companies are taking on more and more characteristics of traditional industries, which makes them wonder what path they should take to achieve a change in wealth status and class advancement.

The Korean website “Global Economic News” also said that the weak job market, weak economic growth, anxiety caused by rising prices, anxiety about loan repayments, and a sense of loss caused by the government increasing the number of part-time jobs for the elderly to meet employment numbers are the deeper realities that cause young people to be enthusiastic about venture capital.

Is it cool to invest in something that is popular on the Internet?

In addition to the economic aspect, “meme investing” is another reason why cryptocurrencies are so popular. According to VoxNews.com, young people growing up in the Internet age are putting a lot of money into a token or a stock, not because they have a different value, but because they think it’s cool and fun to invest in something popular on the Internet, and cryptocurrencies are a prime example.

Sam Bankman Fried, founder of FTX, a digital asset derivatives trading platform, and a popular billionaire in the cryptocurrency space, said that in the current financial environment, any modal asset can be valued at more than $20 billion. While this may seem somewhat absurd, at one point earlier this year, retail investors on the WallStreetBets board on the U.S. Reddit forum sent investors around the world into a frenzy when shares of U.S. listed GameStop quickly rose 2,300% and prominent Wall Street hedge funds came out of the woodwork with huge losses. According to Vox News, the retail investors who bought GameStop shares largely viewed GameStop as a product with modalities rather than a quality enterprise.

According to Chen Bo, on foreign social media platforms, many “big shots” including Tesla CEO Musk advocate cryptocurrency investment, which also attracts many young people who “live and breathe social networking”. However, China has a strong control on the related speech, and with the tightening of related policies, the proportion of Chinese cryptocurrency investors to global investors is decreasing. Chen Bo stressed that young people should not be encouraged to invest in cryptocurrencies because they are essentially only risky and have no value, and lack pricing models in the financial industry, “There is no upper limit or lower limit to the volatility of cryptocurrencies, and there is neither a rule nor a mature investment strategy.

According to Korea’s Asean Economy, cryptocurrency prices fluctuate significantly and can be traded anywhere, anytime, 24 hours a day, creating negative problems similar to “gambling poisoning” and “gambling addiction” in real life, which requires extra vigilance from society and individuals. This requires extra vigilance from society and individuals. A Korean university student told the media that since he invested in cryptocurrencies in February this year, “it was hard to really fall asleep and the market kept hovering in my head. In the worst case, he set an alarm clock on his smartwatch to remind him in real time”, during which he experienced the shock of the cryptocurrency price rising six times in two weeks and then falling below the starting point in two weeks, losing most of his 25 million won investment in three months. The Korean college student eventually found a counseling office and began treatment for his “trading addiction”. Another Korean investor in his 30s was much more fortunate, having invested 20 million won in the token market last year with his spare money, which rose to a maximum of 1 billion won. The cryptocurrency market suffered a sharp shock in mid-April this year, although he rushed to cash out and also earned a full 500 million won, eventually managing to purchase a wedding house.

As more young Indians start investing in cryptocurrencies, reports of fraud are starting to rise, Bloomberg reported. From fake giveaways to fake initial token offerings to identity theft, scammers are using a variety of tactics to trick novice cryptocurrency investors. The police officer in charge of cybercrime in Bangalore, India, told Bloomberg that most victims of cryptocurrency fraud are under the age of 45. Most of the cases they handle involve criminals promising investors high returns via social media, getting their money and then disappearing without a trace, leaving investors with a pile of worthless torrents. In the U.S., cryptocurrency fraud has also risen. The U.S. Federal Trade Commission reported 7,000 cases of cryptocurrency-related fraud and more than $80 million in investor losses from October 2020 to May 2021, an increase of more than 10 times year-over-year and 100 times more than in 2019.

South Korea’s Dong-A Ilbo reports that the cryptocurrency market is descending into chaos. Currently, both China and the U.S. have started actions to strengthen cryptocurrency regulation, which has also indirectly led to the bursting of the bubble and drastic market fluctuations. Under such circumstances, investors should remember the principle of “invest yourself” and the government should establish a minimum regulatory scheme to stop illegal acts such as market price manipulation and fraud.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/global-times-its-time-for-young-people-to-wake-up-to-their-dreams-of-riches-in-the-cryptocurrency-world/
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