According to recent headlines in the news. “The Crypto Crisis Continues“, “Investors Lost $2 Trillion“, “Bitcoin Seeing a Worst-Case Scenario“, it barely has a pulse. But even after the fall of FTX, Sam Bankman-Fried’s arrest, and Binance’s temporary pause of withdrawals of the Stablecoin USDC, crypto is alive and well. Yet investing in crypto isn’t for everyone.
Beginner investors are often drawn to cryptocurrency because it’s easy to choose from one of the popular exchanges, like Cash App or Coinbase, decide how much to invest and what type of crypto to invest in, and then manage their investment. Of course, choosing a digital wallet is an important step to simplify payments and to prevent fraud. But, overall, the process of investing in cryptocurrency isn’t very daunting.
Adventure seekers of all ages love the risk factor that comes with crypto. 48% of Millennials surveyed by CNBC Make It and Momentive said they believe crypto to be “highly risky”, and yet are open to taking the risk. Why is that? According to reporter James Royal from Bankrate, “For many younger investors, the interest in crypto is due to the lottery-ticket atmosphere, where it appears that you can get rich quickly.” But how many cryptocurrency investors have really hit it big? That’s not easy to say currently.
In spring of 2022, there was an estimated 81,408 people holding at least $1 million in Bitcoin, according to BitBuy.com. But by October, that number dropped by over 70.23% down to 29,497 according to FinBold.com.
Think of all the celebrity investors that got behind cryptocurrency in recent years. Football legend Tom Brady and his then-wife Gisele Bündchen were given equity stake in FTX in 2021. NBA great Steph Curry became an FTX ambassador and was also given equity stake in FTX. According to Morningstar, the list of celebrity investors is long and most of those celebrities, if not all, stand to lose a lot of money since the collapse of FTX.
Regardless of what you see in the news, “what goes down must come up”. Cryptocurrency will continue to take a hit but will rebound in time. And, when it does, more celebrities will hop on the bandwagon and the MLB and the Mercedes F1 team, which both cut ties with their partner FTX, will likely get another crypto endorser.
For now, we’re here to help clients with Investment Management that reflects risk tolerance, time horizon and goals. Contact us to get started. 800-689-3935