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Nearly a Third of Millennials Say They'd Rather Own Bitcoin Than Stocks (bloomberg.com)

Posted by BeauHD on from the market-capitalizations dept.

An anonymous reader quotes a report from Bloomberg: A survey by venture capital firm Blockchain Capital found that about 30 percent of those in the 18-to-34 age range would rather own $1,000 worth of Bitcoin than $1,000 of government bonds or stocks. The study of more than 2,000 people found that 42 percent of millennials are at least somewhat familiar with bitcoin, compared with 15 percent among those ages 65 and up. Bitcoin rose more than 6 percent Wednesday to as much as $7,545, helping to push the value of the total cryptocurrency market above $200 billion for the first time, according to CoinMarketcap. The digital asset has soared more than 600 percent this year, compared with gains of 15 percent for the S&P 500 Index -- which might explain millennials' attraction.

1 of 312 comments (clear)

  1. Re:And this... by tlhIngan · · Score: 4, Informative

    If you're investing in something because it's continued to climb and you're convinced it can't go down, you're simply wrong. It can, and it will. Maybe not tomorrow, but eventually. Bitcoin is a bit more insulated because it's designed to become harder to acquire over time (which coincidentally enriches early adopters), so the supply constriction enhances an increase in value (e.g. imagine what would've happened to home prices if the more people bought homes, the fewer homes builders were allowed to build). So its crash won't happen until enough people realize how stupid a trait that is for "currency" or something with no intrinsic value.

    No, it will happen like all bubbles do - it pops when people start cashing out. It's worse with Bitcoin because its very low transaction rate means it can be extra volatile.

    Even more volatile will be the exchanges - if someone were to convert more than a few bitcoins, will exchanges have the liquidity to perform the exchange? If you have say, 100 bitcoin and it reaches $10,000/BTC, you're looking at a million bucks. Will the exchange you use have the liquidity to cash it?

    This could easily lead to a run as people trying to cash out run into exchanges unable to cash out - they simply run out of cash.

    That's the likely scenario that will crash it - someone starts selling, exchanges stop being able to exchange and everyone is locked into bitcoins because there is no liquidity to convert it. The exchange rate falls sharply because exchanges with money will realize they will run out of it fast as the thunderous crowd of people trying to cash out come knocking.