Drew Austin, an entrepreneur and investor, invested heavily in cryptocurrencies and NFTs, including digital horses, digital sports cards, and some digital art. It suffered a “significant liquidity blow” when cryptocurrency prices collapsed in May, he said. But he’s not cashing in because he believes these new assets are the future. Still, the volatility can be stressful. Unlike an exchange, these newer markets never close.
“There are nights when I go to bed and think, please God, China, don’t screw this up,” he said in a stronger language. “It’s around the clock. It will never stop.”
Bitcoin’s volatile month – down around 65 percent in May, bouncing back a bit, and then falling further this week – didn’t affect investor excitement. A recent survey by The Ascent, a financial services review site, found that Generation Z investors viewed cryptocurrencies as slightly less risky than individual stocks.
But they learn that wild price fluctuations can happen over a single tweet. In February and March, when Elon Musk and his company Tesla accepted Bitcoin, the price soared. When Mr Musk tweeted in May that Tesla would not accept Bitcoin payments due to environmental concerns, the price fell.
It bounced again this week when Mr Musk suggested on Twitter that Tesla would one day accept Bitcoin again. (His tweets also pushed Dogecoin, a joke cryptocurrency based on a meme about a Shiba Inu.)
The continuing appetite for risky bets has fueled companies like Robinhood, which allow customers to trade stocks, options and cryptocurrencies. In January, Robinhood’s role in trading meme stocks put it in hot water with Congress, state regulators, and its customers.
The attention has only fueled Robinhood’s growth: sales more than tripled in the first three months of 2021 compared to the same period last year. Robinhood plans to go public in the coming months.