To Crypto or not to Crypto?
Throughout 2020 and in 2021 the popularity of cryptocurrency increased, particularly among young people, who were investing with the hope that they will make millions from trading. The lure of making millions has raised the question of whether young people are specifically targeted to invest in cryptocurrencies. A lot of young people find themselves asking whether to crypto or not to crypto? Many are thinking is crypto real. Is crypto viable? and is crypto the future? Furthermore, in recent times, we have seen that a selected few people who have social media influence, namely Elon Musk, are able to manipulate the cryptocurrency market in their favour. Now, this raises more question on whether cryptocurrency is a decentralised market.
In May 2021, the cryptocurrency Bitcoin took a major hit resulting in falling Bitcoin prices. This came about because there has been a lot of governing bodies making announcements of how they intend to regulate the cryptocurrency market. Specifically this week, we saw the Chinese government announcing that they intend to ban cryptocurrency payments. In addition the US government also announced ways in which they look to regulate the cryptocurrency market. Both of these announcements led to a downward push on the Bitcoin price; so the question is – if cryptocurrency is a decentralised market then how then is it possible that one governing body caused Bitcoin to fall. Surely, this then means that the cryptocurrency market is not in fact a decentralised market as there are individual organisations that are able to influence the price.
This can even be extended to individual persons; we have seen the power of individual people having an influence on cryptocurrency prices. Over the last month, we saw how Elon Musk, CEO Tesla and Michael Saylor, CEO Microstrategy able to simply put out a tweet on Twitter and that led to a shift in crypto prices. So again, this is another example of how cryptocurrency is in fact not a decentralised market but in fact there are very selected people and organisations who are able to influence the prices in a way that either favours them or goes in the direction they want prices to go.
Cryptocurrencies being a new commodity has engaged a lot of people due to the excitement that it brings. It is mainly created digitally and we are in a digital era so this has really pulled in a lot of young people into the trading world. However, a lot of young people may not be fully informed of just how the cryptocurrency world works and particularly the mechanics of it.
Recent articles have uncovered that cryptocurrencies are used in such a way that exploits regulations/sanctions by country officials, and others have highlighted how cryptocurrencies add to the effects of climate change – so questions have been raised on how just how ethical cryptocurrencies are and whether more needs to be done to highlight these to people that are less informed. This then begs the question of those who do invest in cryptocurrencies, do they really care about these things or are they there primarily for the gains and I suspect the latter is truer. From young people’s perspective, more educational content is needed so that they understand much better what cryptocurrencies entail.
On a final note, I am not in fact against cryptocurrency as I find that this new innovation speaks to just how digitally inclined we currently are and I relish in the excitement that it brings and the complexity that is involved. However, this does not negate the fact that cryptocurrency does not always mean good and we must be careful in what we invest in. I do wish there is more clarity on just how cryptocurrency is formed, which will then allow people to make a more well-informed decision.
I feel a lot of young people are lured into this world not really grasping the seriousness of what they are about to embark on and this week, with the fall of Bitcoin prices, showed just how uninformed many young people are with many losing their life savings or large amounts of money, simply because they were under the impression that cryptocurrency was a safe haven when in actuality it’s just like every other investment vehicle.