Continuing the previous article The Psychology of the Crypto Market About Bitcoin Hype, this time we will describe another reason why people can go crazy with crypto currency, bitcoin. Bitcoin has attracted the interest of many investors from various parts of the world. This year, the value of Bitcoin reached its highest point. Here is the market behavior and psychology towards Bitcoin hype.
3. Volatility can be exciting
Many smart investors, from CNBC’s Kevin O’Leary to Jim Cramer, have likened buying bitcoin to going to Vegas.
Berkshire Hathaway CEO and Chairman Warren Buffett has long criticized bitcoin. Buffett says that “cryptocurrencies are fundamentally devoid of value” and are “gambling devices.”
And as with gambling, “some people definitely enjoy the thrill,” says marketing professor Utpal Dholakia at Rice University.
“With something like bitcoin, it’s interesting because there’s always something going on,” he said. “You can check it 10 times a day and the prices can vary a lot.”
The phenomenon called FOMO (Fear Of Missing Out) actually originates from social media. But then it continues to investing.
In cryptocurrency, this phenomenon occurs when many people are desperate to buy bitcoin, ripple, or ethereum at very high prices, even though they have no idea what cryptocurrency is. They hope to get rich suddenly like other people who have bought it first. this is what is called the FOMO phenomenon.
People focus more on the upside than on the downside. So, it is very easy to get immersed in the various possibilities that can come from bitcoin.
5. Giving Hope
The excitement of bitcoin, especially among young people, illustrates that people feel “locked out of the ability to own the kind of asset that will allow them to generate any form of wealth,” said Breton.
Millennials, born between 1981 and 1996, controlled just 4.6% of US wealth until the first half of 2020, according to data from the Federal Reserve, the US central bank.
“When we saw the fever around bitcoin, we saw it as a demonstration of the fact that this was happening because no non-speculative system on which to rely on which people who don’t yet have access to US wealth can make money over time [the fast way], “said Breton.
“It is becoming evident that currently [bitcoin appears] to be prepared for younger people [to take high risks].”