Drew Austin, an entrepreneur and investor, has made significant investments in cryptocurrencies and NFTs, such as digital horses, digital sports cards, and some digital art. When cryptocurrency prices crashed in May, he said he took a “substantial liquidity hit.” He is not, however, cashing out because he believes that these new assets are the future. Nonetheless, volatility can be stressful. These newer markets, unlike stock exchanges, never close.
“There are nights when I go to bed and think, ‘Please, God, China, don’t mess this up,’” he said emphatically. “It is available 24 hours a day, seven days a week. It never ends.”
Bitcoin’s volatile month — a drop of around 65 percent in May, a partial recovery, and then a further drop this week — has not dampened investor enthusiasm. According to a recent survey conducted by The Ascent, a financial services ratings site, Generation Z investors view cryptocurrencies as slightly less risky than individual stocks.
However, they are discovering that wild price swings can occur as a result of a single tweet. When Elon Musk and his company, Tesla, embraced Bitcoin in February and March, its price skyrocketed. Bitcoin’s price fell in May after Mr. Musk tweeted that Tesla would no longer accept Bitcoin payments due to environmental concerns.
It rose again this week after Mr. Musk suggested on Twitter that Tesla would once again accept Bitcoin. (His tweets have also propelled Dogecoin, a satirical cryptocurrency based on a Shiba Inu meme.)
The continued appetite for risky bets has fueled companies such as Robinhood, which allow customers to trade stocks, options, and cryptocurrencies. Robinhood’s involvement in the trading of meme stocks landed it in hot water with Congress, state regulators, and its customers in January.
The attention has only accelerated Robinhood’s growth: When compared to the same period last year, revenue more than tripled in the first three months of 2021. Robinhood intends to go public within the next few months.