BITCOIN: CRYPTOCURRENCY 'NOOBS' LEARNING TO ENJOY THE GREAT ADVENTURE OF DIGITAL COIN INVESTMENT
In recent months, there's fluctuation in the value of Bitcoin and other virtual currency
Personal finance writer J.R. Duren was set on doing his own crypto-rollercoaster, after he has researched about digital currencies for work last year.
In November, Duren bought $5 worth of litecoin and thereafter purchased $400 more. In a short period, Duren experienced a rally, a crash, and a recovery, with the kind of energy that comes along with the highs and lows.
Duren stated about watching his investment drop suddenly to 40 percent at one point, "At first, I was freaking out, the precipitous drop came as a shock."
Some crypto-investors do not necessarily think bitcoin will replace the US dollar and 39-year-old Duren is part of that new class. And he doesn't think too that the modern finance would be revolutionised by the blockchain.
Ordinary investors jumping onto the latest trend, with low understanding of how cryptocurrency works or why they exist, are now referred to as the "noobs" rather than "newbies" by longtime crypto-investors.
Recently there has been a big shift in investors type on cryptocurrency platform. It has shifted from a small group of techies to regular Joes. There's conversations about cryptocurrencies everywhere, in restaurant and parks.
The best-known virtual currency now is Bitcoin and there are now over 1500 to choose from, according to market data website CoinMarketCap, including popular coins like ether and ripple and the less known coins like dentacoin, the one intended for dentists.
It is not known exactly how many "noobs" joined the trend last year because each transaction is pseudonymous and it is only few exchanges that collect or share detailed information about their users.
Investing on the platform has been much easier thanks to a variety of consumer-friendly websites, and ordinary retail investors who were rarely spotted on the cryptocurrency pages of social news hub Reddit before now fill their posts with online forums.
About eight persons were recently interviewed by Reuters regarding their first foray into digital currency investment. Many of them were motivated by a fear of missing out on profits during what looked like a never-ending rally last year.
In December, the worth of one bitcoin was almost $20,000, from the start of 2017 it was up around 1,900 percent. As of Friday afternoon one bitcoin was worth about $10,000 after having fallen as much as 70 per cent from its peak. Other coins even made bigger gains and experienced equally dizzying drops over that time frame.
A research analyst in New Jersey, Michael Brown said :
“There was that two-month period last year where all the virtual currencies kept going and up and I had a couple of friends that had invested and they had made five-figure returns."
He later stated that he bought around $1,000 worth of ether in December.
“I got swept by the media frenzy,” he said. “You never hear stories of people losing money.”
Brown's holdings soared as much as 75 per cent and tumbled as much as 59 per cent, during the weeks of his investment.
Before its 2013 crash longtime investors who invested in bitcoin like to refer to themselves as “OGs,” which is short for “original gangsters.” They argue that cryptocurrencies will be worth much more in the future, shrugging off the recent downtrend.
Xavier Levenfiche, who in 2011 invested in cryptocurrencies said :
“As crashes go, this is one of the biggest. Well, taking things into perspective, it's a hiccup on the road to greatness.”
Frightened by the sudden fall but not willing to book a loss, many investors are readily accepting a mantra known as “HODL.” This term originated in a December 2013 post on the Bitcoin Forum message board by an apparently inebriated user who wrote he was “hodling” his bitcoin, instead of “holding.”
The personal finance writer, Duren, is also holding onto his litecoin for now, though he regrets spending $33 on credit card and exchange fees for a $405 investment.
In October, one investor said that he and his family had sold everything they owned - including their business, home, cars and things - to move to a “digital nomad” camp in Thailand. He has predicted that one bitcoin will be worth between $30,000 and $50,000 by year-end.
Though he stated that he is not in it to become bitcoin millionaires. He has other plans to write a book and probably make a movie about his family's experience.
Some small investors who invested big into cryptocurrencies for the first time during the rally last year remain positive.