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Evolution of cryptocurrency investors

As the cryptocurrency market expanded, investing evolved. Trading in 2017, investors banked on armature investment strategies. When Mt. Gox, a now-defunct crypto exchange based in Tokyo, was existent, the size of investors and transactions was much smaller. A handful of investors raked in a great deal of money by betting big on cryptocurrency. Tim Draper is among them, investing a substantial amount after Mt. Gox was hacked. Draper has lost all of his bitcoins held at the Tokyo-based exchange, but he took over the 30,000 bitcoins that the Federal Bureau of Investigation put up for sale for $632 each. Considering the current price of bitcoin, the decision proved profitable. In 2014, the initial coin offering (IOC) for ethereum came in. Ethereum introduced the idea of an open protocol, called ERC-20, that helped raise money for the launch of the digital coin. A number of other ethereum-based coins debuted after that through ICO. Investors started “studying” the coins, sifting through the white papers of new currencies. 2017 was bullish market era for cryptocurrencies. The prices of the coins skyrocketed as the term “blockchain” boosted the appeal. At the time, many investors made investments somewhat recklessly, without sufficient risk-taking analysis. Some investors remained on the buying side just because a chart showing transactions of bitcoin shows a certain shape that resembles a character from a popular cartoon. Cryptocurrency futures came into being just before the bullish market ended. The debut could be interpreted as either good or bad news. It was good news as the cryptocurrency market can now bring in a large-scale funds from institutional investors. The downside was the vulnerability to short-selling. Since the launch of crypto futures, the cryptocurrencies have been on a downward trajectory. As the cryptocurrency market came under a regulatory framework, investors experienced the rules of the capital markets. Still, there hasn’t been much of an influx of new investors due to the negative sentiment toward cryptocurrency. There are no more novice bitcoin investors. Speculative big bets on digital coins are not sustainable. An alternative is the so-called “quant” investment that relies on data and numbers. The decisions are made based on the data of the daily markets. The quant investors are required to have mathematical skills and coding to program arithmetic modeling into coded words. Since 2019, those investment and investors have come into mainstream, and are expected to grow further.

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