[London, 18th Reuters] -Bitcoin is squeezing its share in the $ 2 trillion crypto asset (cryptocurrency) market with smaller rivals. Most of these cryptocurrencies, collectively called "altcoin", have little use other than trading. However, few investors seem to be worried about pushing prices up with aggressive investment.
Some altcoins, such as Ethereum, have the ambition to play a key role in the future financial system, but many others, such as Dogecoin, do not have such far-reaching goals, such as payments and business. It is rarely used for.
On the other hand, for a group of individual investors who are investing in altcoin, the story of each coin and the magnitude of the price volatility that can lead to big losses are often not important. Rather, buyers are looking at the opportunity to make quick money, or at least get some fleeting fun.
Demi Stahl, 27, an electrical engineer in The Hague, the Netherlands, holds several altcoins worth a total of about $ 8,000. The investment so far includes "Shiba Inu" purchased for 30 euros (about 4000 yen). Shiba Inu was derived from Dogecoin and made a leap to the top 20 cryptocurrency trading volumes for a time earlier this month.
Mr. Star said, "I think Shiba Inu is an'interesting story'coin like Dogecoin," and learned a few days ago that it was listed on the exchange that I use, so "This is interesting. I feel like buying it. I look back on it. It is said that this transaction doubled the amount of money.
However, while Altcoin can be expected to have such fun and profits, it suffers from volatility. In other words, investors may have to "take out" a large amount of money, and unlike Bitcoin, many altcoins are difficult to monetize at exchanges and can only be exchanged for other digital currencies.
Still, Bitcoin's share of the crypto market has fallen from 70% to 45% this year as investors rush to Altcoin, according to US research firm Coin Metrics. CryptoCompare also provided data that Bitcoin's share of trading volume at the major exchange Binance was halved to 23%.
Bitcoin still has a market capitalization of about $ 800 billion, and is certainly more widely accepted as a payment method than other cryptocurrencies. Ether, which has the second largest transaction scale, is chasing this violently, and as the use of Ether's blockchain technology by the platform that handles "P2P financing (loans between individuals via the Internet)" has expanded, the market capitalization The total amount has quadrupled this year, reaching around $ 380 billion.
The rise of Ether spurred the altcoin boom among individual investors with abundant cash on hand. This is part of a major trend that has encouraged the spread of investment apps like Robin Hood and has led to so-called "meme stocks" soaring, such as gamestops through investment through information exchange on social media.
Amal Lai, a 25-year-old risk consultant who has doubled the scale of cryptocurrency investment since March last year, said, "(Cryptocurrency market) operates 24 hours a day, 7 days a week, so for those who work. It's easier to use. "
<Smell of making money>
In addition, all six altcoin investors interviewed by Reuters are men in their twenties. He said he made an investment decision based on information gathered from social media such as Reddit, Twitter, and TikTok.
Transactions are expanding as Ether is expected by supporters to change the financial framework. But as retail investors become more likely to refer to social media trends, the value of altcoin, which lacks such a clear future, is also expanding.
Take Dogecoin as an example. This virtual currency started as a joke in 2013, and the motif is the Shiba Inu used in "Memes (images spread on the Internet)". Still, the price hike does not stop.
The rate of increase since the beginning of the year has exceeded 10,000%, and the market capitalization is over 60 billion dollars, which is one of the top five virtual currencies. On the other hand, the use of payments is not widespread at all, and the unlimited supply makes it unattractive as an inflation hedge that investors feel about the rare Bitcoin.
The rate of increase since the beginning of the year has exceeded 10,000%, and the market capitalization is over 60 billion dollars, which is one of the top five virtual currencies. On the other hand, the use of payments is not widespread at all, and the unlimited supply makes it unattractive as an inflation hedge that investors feel about the rare Bitcoin.
The rate of increase since the beginning of the year has exceeded 10,000%, and the market capitalization is over 60 billion dollars, which is one of the top five virtual currencies. On the other hand, the use of payments is not widespread at all, and the unlimited supply makes it unattractive as an inflation hedge that investors feel about the rare Bitcoin.
Instead, Dogecoin's momentum was boosted by a tweet from a leading supporter, CEO of Tesla, a major US electric vehicle (EV) company. Prices jumped about 25% last week when Musk said he was working with Dogecoin developers to improve the efficiency of their transactions.
However, Mr. Stahl, an individual investor who appeared at the beginning, recently suffered a big loss in investing in Dogecoin. "A few weeks ago, I bought it just because it looked interesting and spent hundreds of euros, but it didn't work. I bought it at the wrong time," he said.
The price of Shiba Inu, which is derived from Dogecoin, has risen by more than 2000% in the four days until the 11th of this month. The price level per coin is about one hundred thousandth of a dollar, which is almost impractical, but the Shiba Inu website claims that it is an "experiment to create a decentralized and spontaneous community." There is.
For Austin Alexander, 24, who works as a plumber in Vancouver, this is a word that smells like making money. Alexander, who started buying Shiba Inu about four weeks ago, said, "The technology behind it is interesting, but it's the money that attracts me."
According to the Crypto Market Cap, Shiba Inu's market capitalization has fallen by 60% in the past week, but is still around $ 6 billion.