Crypto Investors: What Their Behavior Says About the Market
Since cryptocurrency first came on the scene in 2009, the mindset of crypto investors has evolved beyond anyone’s imagination. What started as a rebellious group of Dark Web anarchists eventually evolved into a worldwide community of finance and technology “nerds” constantly on the search for the next unicorn investment opportunity. Today, their mindset and behavior are critical in determining what the market looks like now and how it will evolve in the future.
Crypto investors are buying crypto because of technical analysis
For those around during the 2017 bull run, then you remember the large majority of it was based on hype. It was as if people bought any altcoin simply because they heard about it on the news. Ultimately, that turned out to be a horrible strategy as the majority of these altcoins were based on nothing of substance. However, today’s crypto investors have learned a lesson.
With the new suite of tools readily available, market participants rely far more on technical analysis, market fundamentals and industry research reports. Statistical evidence is winning against the speculative theory. As a result, crypto investors are making smarter, well-informed decisions that help to grow the legitimate projects in the space and weed out the fraudulent/weak ones.
Crypto investors are optimistic even in an economic crisis
Even with the price of Bitcoin going from almost $11,000 USD to almost $4,000 USD in one month, crypto investors are still optimistic and here’s why. As you see in the cart above, After the initial big one day drop, the market stabilized. There will always be some people panic selling in an event like that and it’s unavoidable. What’s important to note is that institutional investors remained in the game.
Not only did the crypto market stabilize on its own, but it also started recovering independently from the traditional stock market. Most experienced traders realize this is a prime opportunity to buy crypto while it’s cheap, with some even utilizing crypto-backed lending platforms to help them access more capital. No one can predict for sure where the market will be at the end of the year but judging by this market behavior, we can assume the overall mentality is a bullish one in the industry today.
Crypto investors are more level headed than before
The rising popularity of dollar-backed stablecoins is proving that crypto investors are less interested in instant profit and more interested in stable, long term growth. As we are currently in the worst worldwide pandemic since the Spanish Flu in 1918, global markets are quickly deteriorating. Yet, the majority of major stablecoins are holding their own and living up to their namesake.
Investors love stablecoins because it makes it easy to increase liquidity during times of market movements. In traditional systems, this process could take days if people wanted to move funds between fiat and crypto and back again. In addition, there are more options than ever for traders to use their stablecoins in a savings account. YouHodler’s high yield savings account for example offer users up to 12% APR on stablecoin deposits, attracting a new breed of long term “HODLers.”