In late 2017, the values of several major cryptocurrencies such as Bitcoin and Ethereum skyrocketed, but in early 2018 they plummeted almost as quickly. Similarly, since early 2017 the stock market has suffered a period of general volatility, though it has been relatively stable compared to cryptocurrency. Among those affected by this turbulence are WHS student investors who are navigating these uncertain markets.
Cryptocurrencies were initially designed to replace physical currencies, but recent market volatility has rendered them impractical compared to this original purpose. Various forces influencing the unstable cryptocurrency market include a glut in coin supply as well as widespread fraud. Likewise, recent political events have also heavily affected stock prices.
Despite this volatility, WHS student investors continue to remain interested in cryptocurrency largely due to its technological benefits. Sophomore class president John Lian said he first got into cryptocurrency a few years ago, when most users were not looking to profit from trading.
“I’ve been involved with cryptocurrencies as early as 6th and 7th grade, when I bought $15 worth of Bitcoin with a Target gift card. Since then, I’ve gradually become more and more interested in the space until the summer of 2017, when I finally got a sizeable amount of money invested,” Lian said.
Freshman George White has also been exploring cryptocurrency for a few years, initially mining coins exclusively, but eventually trading them as well.
“I got into cryptocurrency a few years ago because I could mine it for free on my computer,” White said. “I could then use the coins that I mined to trade and invest in new projects.”
Lian said that his portfolio is comprised of nearly 100% Ethereum due to its relative stability and technological benefits.
“I hold nearly 100% Ethereum, since I believe it is the future for blockchain technologies. Ethereum is supported by corporations like Microsoft, Pfizer, Mastercard and Intel, and it has the most potential and is a very safe investment relative to other cryptocurrencies,” Lian said.
Lian said that he has learned many valuable lessons in the three years he has been involved with cryptocurrency.
“Cryptocurrency is an unregulated space, compared to stock markets, and as a result one can be exposed to more dangers,” Lian said. “Always do your own research before doing anything, whether it be making a trade or making a transaction. Remember that everyone is a genius in an upwards market, and it can be equivalent to gambling.”
Freshman Neil Malur is also investing in an upwards market, albeit one more stable than cryptocurrency. Along with several other students in business teacher Corey Guerra’s Principles of Business class, Malur is investing in stocks and has been doing so for a little under a year.
“I’m investing mostly in tech stocks, like Microsoft or Amazon, but I’m also in some other financial companies like Ameriprise or Walmart. Sometimes I also short sell; for example, short selling Sears has yielded profits in the past,” Malur said.
Guerra said that he does not actively encourage students to put their own money directly into the stock market, although he maintains that using online simulations can help students learn more about how the market behaves. He also suggested that cryptocurrency could be an important tool in this regard, as it demonstrates the behavior of an unregulated market.
“Cryptocurrency is a very good learning tool because it really gives a broader idea of how supply, demand, public opinion, and risk work,” Guerra said. “I like the concept of cryptocurrency as such a tool because it’s an unregulated market, which means that rumors can cause their values to drop like a stone.”
Despite this notorious volatility in the cryptocurrency market, Lian is positive about its future.
“Since this is the world’s first unregulated, global market on this scale, there are many scams and fake projects that aren’t what you think,” Lian said. “However, there are some seriously disruptive and world-changing technologies being developed by the world’s smartest and most ambitious people in this space.”