Bitcoin, reputed as the most popular and largest cryptocurrency in the world, hit an all-time high of $68,000 on November 10, 2021. As at the time of writing this article, its volatile nature has been subjective of a drop to about $48,000.
The mainstream financial institutions are in top gear as JP Morgan’s envision of the coin being competitive with assets like Gold is coming into fruition even as the price had a dip from its all-time high within a few days.
Though it’s a cryptocurrency, Bitcoin has become a toast for many. So here are some behavioral and psychological reasons behind Bitcoin investment potential.
1. Bitcoin Volatility Is Exciting
A slew of smart investors has taken the semblance of buying Bitcoin to visit Vegas. Also, some financial executives like Warren Buffett have alluded to Bitcoin as a “gambling device.” In a converse reaction to Buffett’s stance on the coin, some people still enjoy the thrill that the supposed gambling brings.
Generally, having a regular check on the price of Bitcoin is an activity that comes with excitement as it is evidence of something happening. In a day, the price of Bitcoin can be checked ten times even as the price vary wildly. In addition, the excitement about Bitcoin can stem from its feature as a high-risk high-reward investment which seems to make great sense.
2. Social Media Plays Pivotal Role In Bitcoin
From an array of celebrities who are Bitcoin investors, to a highly-engaged Bitcoin community on social media platforms like TikTok, Twitter, social media feeds into the coin’s popularity.
Often, social media platforms influence the behavioral pattern of Bitcoin’s potential investors. Research has further shown that there is a likelihood for people to become risk-seeking when there is the constant conversation surrounding investments in online social environments.
3. Bitcoin Brings Hope
Money is the new technology that enables the imagination of the future. The excitement Bitcoin has created, mostly amongst young people is its status as an asset capable to create wealth. There is already a Bitcoin fever in the crypto space such that there are unreliability and non-speculative mechanisms where people who have not been enriched with its fortune could have undeniable access to it. This is because there is now a change in the narrative of how wealth creation is being set up for young people.
Bitcoin is gaining traction from serious investors and major financial institutions. However, the concept is still subversive and Bitcoin investors can be seen as radicals or counterculture participants.