Drew Austin, an entrepreneur and investor, has invested heavily in cryptocurrencies and NFTs, including digital horses, digital sports cards, and some digital arts. It suffered a “substantial liquidity blow” when cryptocurrency prices collapsed in May, he said. But he’s not cashing, because he thinks these new assets are the future. Still, volatility can be stressful. Unlike a stock exchange, these new markets never close.
“There are nights when I go to bed and I’m like, ‘Please, my God, China, don’t ruin this,’” he said, using louder language. “It’s 24/7. It never stops. “
Bitcoin’s volatile month – dropping around 65% in May, recovering some and then declining further this week – hasn’t swayed investor enthusiasm. A recent survey by The Ascent, a financial services rating site, showed that Gen Z investors viewed cryptocurrencies as slightly less risky than individual stocks.
But they learn that crazy price swings can happen on just one tweet. In February and March, when Elon Musk and his company Tesla embraced Bitcoin, its price soared. In May, when Mr. Musk tweeted that Tesla would not accept Bitcoin payments due to concerns about its impact on the environment, its price fell.
It jumped out again this week when Mr Musk suggested on Twitter that Tesla would accept Bitcoin again someday. (His tweets also propelled Dogecoin, a cryptocurrency joke based on a Shiba Inu meme.)
The sustained appetite for risky bets has fueled companies, like Robinhood, which allow clients to trade stocks, options, and cryptocurrencies. In January, Robinhood’s role in memes stock trading put him in hot water with Congress, state regulators and his clients.
The attention has only supercharged Robinhood’s growth: revenue more than tripled in the first three months of 2021 compared to the same period last year. Robinhood plans to go public in the next few months.