Why people are so obsessed with bitcoin: the psychology of cryptocurrencies explained. The Bitcoin fever is back. Bitcoin hit a new high in early January, reaching a price of nearly $ 42,000. As of Friday morning, the price of the notoriously volatile cryptocurrency was around 32,500, according to Earn money by toptips4u.com.
Even major financial institutions are heating up: JP Morgan said that in the long term, if the market cap is high enough to compete with gold, the price of bitcoin could hit $ 146,000, in a note published in January. . (Bitcoin currently has a market value of more than $ 600 billion.).
But more than just a cryptocurrency, bitcoin has become an obsession for many. These are some of the psychological and behavioral reasons why.
Bitcoin becomes part of your identity
Bitcoin is more religious than a solution to any problem, billionaire Mark Cuban told Forbes in December.
In fact, bitcoin fans have their own jargon full of acronyms and phrases from HODL to whale, and bitcoin (pre-Covid) conferences would attract thousands of attendees. The crypto raven even has a preferred car to buy with his bitcoin: the Lambo (also known as the Lamborghini) to Earn money by toptips4u.com.
The culture around bitcoin is part of the appeal, says Finn Breton, professor of science and technology at the University of California Davis and author of Digital Money: The Unknown Story of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency.
When you buy bitcoins, you are actually buying an entire scene, says Breton. And it is a scene that can be part of your identity.
Although bitcoin is receiving more attention from some serious investors and major financial institutions, it is still a somewhat subversive concept, so people who invest in it may see themselves as radicals or participate in the counterculture, says Breton.
Social networks play with that
From celebrities who invest in bitcoin to a highly engaged bitcoin community on Twitter, TikTok, and Reddit, social media fuels the popularity of bitcoin.
Suddenly, there is a new way of viewing, financing, and having an identity of yourself as an actor in the financial space, says Lana Swartz, assistant professor of media studies at the to Earn money by toptips4u.com. University of Virginia and author of New Money: How The Payment turned into social networks, he tells CNBC Make It.
These social platforms can also drive behaviors, according to Utpal Dholakia marketing professor at Rice University, who studies consumers' financial decision-making. Research has shown that when people talk about their investments in social settings online, they tend to look for more risk in the types of investments they make, he tells CNBC Make It.
Volatility can be exciting
Many smart investors, from Kevin O'Leary to CNBC's Jim Cramer, have compared buying bitcoins to going to Las Vegas to earn money by toptips4u.com. Berkshire Hathaway CEO and President Warren Buffett have long been a critic of bitcoin, saying that cryptocurrencies are basically useless and are a gaming device.
And as with gambling, some people certainly enjoy that excitement, says Dholakia.
FOMO
People are excited about the prospect of bringing new and potentially transformative technology to the world. And with bitcoin bulls predicting that the price of cryptocurrencies could climb as high as $ 200,000 over the next decade, and with major financial firms from Paypal to Square getting into bitcoin, it's hard not to fear missing out.
Add to that the viral stories about people who have been successful with bitcoin - there are enviable windfalls, from instant bitcoin millionaires to stories like the Bitcoin Family, a Dutch family of five that liquidated their assets in 2017 in exchange for bitcoin ( when Bitcoin was priced at $ 900), he moved into a van and traveled the world.
Give hope
The enthusiasm for bitcoin, particularly among young people, illustrates that people feel excluded from the ability to have the kind of assets that would allow them to generate any form of wealth, says Breton. Millennials, those born between 1981 and 1996, controlled just 4.6% of America's wealth during the first half of 2020, according to data from the Federal Reserve.
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