Cryptocurrency, a form of digital money, is believed by many to be the currency of the future. Bitcoin prices have recently tumbled but this is not the first time — nor will it be the last — that we see this. So why is there still such an interest in cryptocurrencies despite their volatility? Wilko Martínez-Cachero has more.
Bitcoin and other cryptocurrencies plummeted to start the week. Nitin Kalé, a professor at USC Viterbi, explains.
NITIN KALÉ: This has happened time and again that, within a short period of time, some currencies or many, many currencies will depreciate or fall at the same time in reaction to global news. […] But often, this reaction is due to national news, economy, and most importantly about regulation.
But despite how crypto fluctuates, the interest in it continues to grow. A recent CNBC survey found that one in ten people currently invest in crypto. El Salvador even became the first country to adopt bitcoin as legal tender a few weeks ago.
So why are people so into crypto? Here’s Lucca Sturari, a finance student at Hult International Business School in Boston.
LUCCA STURARI: Many of my friends and fellow finance students are into crypto and they invest heavily, and they’re firm believers, and I feel like that’s because crypto is kind of an outsider, misfit, rebellious form of currency that opposes the government because it’s unrestricted and it’s very easy to use, easy to get. Governments have a hard time trying to control it, and that’s why I think a lot of young people really get into it.
And a lot of these young people see crypto as the future of currency, adds president of USC Blockchain Harrison Macdonald.
HARRISON MACDONALD: I think it’s only natural that people view crypto as, you know, the future of currencies because, you know, we sort of have this dilapidated system that not very many people trust in. The banking system is full of corruption and, you know, favors, and it’s basically like a bro club.
But Sturari is not convinced.
STURARI: I’’m not interested in crypto because it’s very reliant on governments allowing it to happen, even though it’s decentralized. So it’s extremely dependent on a whole bunch of other factors and I feel like I could use my knowledge better to look at a company and determine.
As of now, the crypto economy looks to continue being unpredictable, but that is unlikely to dissuade amateur traders from investing in it — even as the markets ebb and flow yet again.