This generation has marked the era of immense popularity of crypto-currencies and due to our beloved Elon Musk it’s quiet difficult to ignore them.
People were investing for long in the stock market but reading about some of the super success stories of investing in bitcoin at the right time, people want to know more about that, to get a taste of that sweet gains of booming crypto-currencies.
Volatility of crypto vs stocks
The volatility of stock market has classified people into two categories, those who understands that the share prices are bound to be somewhat volatile depending upon the companies or circumstances and the other group who doesn’t understands this and also doesn’t want to know about the stock market and as an excuse he/she blames the stock market to be pure gamble. Yes investing is stock market may be perceived as a gamble if you treat it as a gamble and just invest your hard earned money in any company. Even if you do your research it may be a gamble in short term, but take a look at the long term price graphs of HUL or Dabur, or any other Bluechip company, it’s growth is almost always positive in the long run.
The share price of a company may be directed by its year on year increase in bottom line of the company or expansion of the company into new sectors or a controversy or a lawsuit against the company etc.
On the other hand, if we take a look at the volatility in price of cryptos, they are mostly caused by popularity. A tweet by Elon Musk and Dogecoin, which was started as a joke rallied up by 400%!! But then also no one could say what would happen to it in the future as Dogecoin has no effective use, therefore you can perceive it’s value to be nil. You can’t buy anything with it. But it’s worth what it’s worth because of its popularity, or we can say, because of Elon Musk making sure that it’s in the limelight. 1 bitcoin is worth almost 47 lakh rupees because it’s the most popular crypto. So more people try to mine it and hence more demand means a rally in price. If investing in stock market is a gamble, then what would you call investing in a cryptocurrency?
But this rollercoaster or better to be said — this volatile nature of crypto is the reason for some of the became rich quick stories.
Is there any future of cryptocurrencies?
Currently, because of such humongous popularity of cryptocurrencies, it looks like it is the currency of the future, a future where dollars or rupees could be obsolete, as it provides much secure payment than any other traditional centralized currency, but this strength of it might me a reason for its downfall. The payment made in cryptos are so secure that the government also can’t keep a track of the payments, anyone could be easily storing their black money or ask for ransoms in cryptos while remaining untraceable, seems like the thugs got a new mode of easy online payment system, huh? And when the government realizes it, it may take strict actions against this system.
The future is hence, very uncertain.
As a generation Z investor, should you invest in cryptocurrency?
As a techie, the concept of a decentralised payment system attracts me but I take cryptocurrency investment as a gamble for myself.
If you really want to invest in it, then start small and only invest that much amount which you are okay to lose. You should definitely not plan your retirement on it. It’s a rollercoaster ride whose end is behind a thick mist.