Finance writer, JR Duren, bouthgt $5 worth of litecoin in December and further $400 more. IN the subsequent months, he says a hike, a crash as well as a recovery. Duren is part of the new class of cryptocurrency investors. They do not really want it to replace the USD, nor do they believe that blockchain will revolutionize finance. These are coined as “the noobs” by the log-term investors. They are called so as they are “newbies” to the industry and have hopped on with little knowledge of the same.
The cryptoinvestor demographic has seen a shift from the small group of techies to average Joes.
Angela Welch, a fellow at UCL Center for Blockchain Technologies has drawn a parallel to the dot-com rush for this phenomenon.Where people hopped onto latest fads in short-lived concerns, only to have their investments disintegrate in the bust.
The exact quantum of “the noobs” in the system is not clear owing to the nature of blockchain transactions, where unique digital addresses are used.
Following this flux, a new range of customer-friendly websites have turned up with posts from ordinary retail investors who were never before seen on cryptocurrency subreddit.
When inquiring into the reason of this shift in the investor demographic, the prime reason cited was the apparent fear of losing out on profits from the unabated bitcoin rally last year.
At the same time the ones who invested in crypto prior to the 2013 crash believe in the mantra of “Buy and HODL”. “HODL” comes form a misspelled reddit where a user said he was not holding his bitcoin but hodling. These investors believe cryptos will be worth much more in the future, and the current volatility is just a hiccup on the road.
As far as retail investors are concerned, they are a bit uncomfortable with the erratic peaks and troughs, but are unfazed so far.