Why people invest in bitcoin and cryptocurrencies was always a mystery to me. But now as a crypto investor and a trader I know investing in cryptocurrency is a great way to store your hard-earned money without losing its value. Bitcoin rallies from $9000 to $64000 in about 5 months. Many new investors are coming into the market without knowing the risks and opportunities that the cryptocurrency market presents. Every market has risks and rewards. It’s the same to crypto markets. Sometimes you can lose everything. Sometimes you’ll make millions from $200. But before you invest your hard-earned money into cryptocurrencies, you should know why people invest in bitcoin and other cryptocurrencies. So let’s dive into it.
Bitcoin and other cryptocurrencies become their religion
Many people that were early to bitcoin are in love with bitcoin. Why not bitcoin changed their lives and made most of them millionaires. But the problem with that is they only invest in bitcoin, and most of them calling all the other coins shit coins. We all know that bitcoin is the king, but many new projects have many use cases and potential. So bashing other cryptocurrencies are not good for the crypto world and new investors. This is common not only on the bitcoin network but also on few main cryptocurrencies like Ethereum and Cardano; It’s better to diversify your portfolio to minimize the risk of losing.
Social Media Craziness around cryptocurrencies
All the financial markets are sensitive to people’s emotions. If people trust the process price goes up. If they don’t price goes down. When celebrities and influential people like Elon musk talk about cryptocurrencies, their prices start to go up fast. When the whole market crash, some people sell cryptos at a loss because of social media news and updates. There is a highly engaged cryptocurrency community for every cryptocurrency on Twitter, TikTok, Reddit, and Facebook. They bring more people into crypto markets. Recently Safemoon had a huge social media attraction; its price went up by 150X. Social media influence can change the whole route of a cryptocurrency. We were one of the first websites that cover the roadmap of Safemoon, and you can read that post here. After Safemoon, we see a huge potential in the Raptor finance project, and it helps to fight against climate change. Check its website Raptor Finance, and our post about the project. Social media is one of the main reasons why people invest in cryptocurrency.
Cryptocurrency volatility makes the market exciting
Throughout the years, we have seen the price volatility of bitcoin and other cryptocurrencies. In 2017 Bitcoin went up to $19000+ from $900 and then crashed down to almost $9000 in few days. In early 2020 bitcoin went down to $3500. If you bought bitcoin at the dip now, you’re up more than 15X. This volatility is attracting some investors, and it scares many investors. Only 1% of the world is invested in cryptocurrency, and soon this number will grow.
Fear of Missing Out (FOMO)
Just think that you bought 1000 Bitcoin for $100 in 2009 when its price was at $0.1 now that 1000 Bitcoin is worth millions. That feeling you felt now is called the FOMO. Many people sold their bitcoin at $0.9, $200, $17000 because at that time, it seems a perfect price. But now it’s worth around $50000 – $60000. There are so many stories about bitcoin billionaires. Because of FOMO, people bought bitcoin at the peak of its bull market and watch their investment go down in price through the years. So before investing, have a clear plan and do dollar-cost averaging. You will be at least 50% more successful.
Cryptocurrency provides hope
Crypto markets have made billionaires and millionaires with just $100. The most recent story is connected with Safemoon. The investor invested $200 into Safemoon as the 19th investor, and he took $21 million at the peak. That’s how cryptocurrencies can change your life. But most importantly, you should know that you can lose everything because of cryptocurrencies. So always invest an amount that you are okay with losing.
All the financial markets are connected to human emotions, and as an investor, you should know how people are reacting to certain situations in the markets. If you master this skill, you will be a great investor and a trader. If you are more interested in cryptocurrency trading, make sure to download our FREE E-Book about cryptocurrency trading.