Why Most Investors Turn Away From Crypto
February 2021
I recently came across a very interesting point of view from a popular Financial Advisor who was writing to his clients. The published story was a summary about how Bitcoin is a total scam and to stay away! I couldn’t help but to think that the reason being could simply because he was a big time financial advisor who potentially manages a multi-million dollar plus portfolio for his long time clients which imposes risk and fears that his personal gains could potentially begin to dissipate if current and future clients decide to move their investments out of their stock investments and into crypto. Or maybe simply because of how volatile crypto is…. that would be hard on any advisor who’s clients investments can tank +50% during a bear market, so I really can’t blame him for either case.
After being in the crypto market for only a couple years now, I’ve come to know that crypto can be extremely volatile during the beginning stages of mass adoption by investors when compared to the stock market. With crypto being so new to the market at this time in history, there aren’t many options for traditional retail and intuitional investors who would like to invest through their own personal advisors, but it’s interesting to see large firms begin to offer crypto to clients as of late.
When it comes to investing into crypto such as BTC, I think we all need to try and look at it all a little differently. In my opinion, I think we need to take a closer look as to why a crypto like BTC has been performing the way it has and more importantly, why BTC went from $1,000 in 2016 to $20,000 in 2018, then crashing down to $4,000 in 2019 and back up to $20,000 in 2020. Then pumping up to $40,000 in Jan of 2021, back down to $30,000 within the same month, and finally 1 1/2 months later working back up to $64,000 on April 14th 2021, which brings us to today, July 21st 2021 where price has retraced back to $30,000. That’s a lot of volatility within the last 5 years and total understand why anyone would want to avoid investing in crypto at all costs.
So with all of that said, what’s one commonality we should be able to see from just the last paragraph? Well, if we’re simply looking at just BTC’s past performance, it would be that yes, this market is highly volatile and people who buy in at a high price and sell at a low price, will in fact lose money. But, as time has proven, over and over again, these crashes are soon corrected back to their previous highs to then almost double in value the following year later. Crypto is a whole new animal in comparison to those who have been conditioned to know how the stock market flows, but again, in my opinion the potential of Bitcoin and all other cryptocurrencies shouldn’t be dismissed by young adults to even investors within their time of retirement.
Dear Reader,
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Sincerely,
Junk