On Tuesday, Nov. 19, investors in cryptocurrency saw record breaking numbers. Bitcoin, a type of digital currency, reached an all-time high passing $93,000. Many believe the future is in cryptocurrency, but what does that mean for the average person who might not be looking to invest?
Let’s start with the first question. What is bitcoin?
“Bitcoin is a peerless, cashless, electronic payment system,” finance expert Dimitrios Koutmos said.
About 250 major companies accept bitcoin as currency, like Starbucks, Whole Foods and Amazon.
In 2010, to buy one bitcoin cost just a few cents. Now to buy one bitcoin, it costs over $93,000.
Finance Professor at Texas A&M University- College Station Dimitrios Koutmos said there are three possible reasons why the value of the cryptocurrency is rising.
The first reason is that it’s more lenient.
“President-elect Trump is expected to take a more deregulatory stance towards the crypto industry,” Koutmos said.
The second reason could be because there have been more positive efforts to encourage investors.
“The crypto industry has invested heavily in lobbying efforts that have a more pro crypto friendly U.S government,” Koutmos said.
And the third reason is one that Koutmos said hits us all, even big-shot investors.
“Inflation is a real problem for everyone and this is driving investors to look for alternative forms for preserving their wealth,” Koutmos said.
But the investment game still has some skeptics.
“I think it’s sort of a scheme. In general, I don’t do the stock market because I believe it’s not dependable and stable,” Texas A&M University-Corpus Christi business student Omar Ahmad said.
It also has people on the fence, like resident Sam Cummings.
“I just don’t feel like I have enough information and enough security to take that risk to invest in it because it’s not a guaranteed return on investment, so it’s not the wisest thing for me to do right now. I got plenty of aunts and uncles that are investing and keep telling me to do it and I’m pretty sure they’ll bring it up on Thanksgiving, so that’ll be a fun conversation,” Cummings said.
But for many, they might just not have the means to invest that much.
“We don’t care about bitcoin or cryptocurrency. I’m just trying to get food on the table and not have to worry about what needs to be paid first. Most people, like me and just general populist, are not really concerned about investing. We’re more worried about getting to work and seeing our families at the end of the day than just what the amount of value in my stock is worth,” Texas A&M University-Corpus Christi business student Donovan Wilson said.
Koutmos said he believes if the market experiences a recession like it did in ’08, Bitcoin’s price will also drop. If that price drops, others said they might give it another go after losing out the first time around.
“I invested in bitcoin back in 2021. I did a couple hundred dollars, let it sit, bought at high at like a couple 50,60 thousand. It wasn’t moving as much because it was a small investment. Ended up pulling out after I lost money and that’s why I kind of stopped investing. Maybe in the future when it drops down I might,” Texas A&M University-Corpus Christi business student Samuel Torres said.
But when you look at what direction crypto is headed in, Koutmos said it comes down to one question you need to ask yourself.
“It’s hard to say exactly, but I actually caution listeners to not believe too much of one side or another. You have to ask yourself are you willing to take the risk,” Koutmos said.
Experts said cryptocurrency is expected to keep growing, passing $100,000 by the end of the year. Some experts said the big cryoto boom, which investors are calling the crypto bull run, is expected to hit sometime in spring of next year.
