The market is in chaos, with assets such as Bitcoin (BTC) reaching new lows in recent weeks, a factor that may influence American investment trends. Despite the lingering uncertainty of the sector's future, the number of investors choosing to invest in it is growing, as digital assets operate in a setting marred by a failing economy and the danger of rough regulations.
According to Finbold data, 18% of Americans had invested in different cryptocurrencies as of the summer of 2022. The figure represents a 125% increase from the 8% of Americans who had an interest in digital assets in the summer of 2020.
By the summer of 2022, 15% of Americans still planned to invest in cryptocurrencies, demonstrating their faith in the sector, notwithstanding the market downturn. The value represents a 36.36% increase from the 11% of Americans who expressed an interest in investing during the summer of 2020.
Investors are ignoring the crypto winter
Surprisingly, Americans' growing interest in cryptocurrency during extended bear markets contradicts historical trends in which a price drop has not attracted more people.
At the same time, the sector has been plagued by fraud incidents in recent months, with the infamous Terra (LUNA) ecosystem collapse taking center stage, with the fall occurring when more investors transformed to stablecoins to help mitigate volatility.
Notably, the growth suggests that the investors in question can withstand the volatility. Such investors are likely aware that it is still a developing asset class and technology whose impact on the general finance sector is unknown. In this case, some investors choose to ignore short-term price volatility and instead concentrate on potential future growth.
Reasons to keep investing
This trend is likely to be influenced by a number of factors, with making quick money standing out. When compared to traditional assets such as stocks, crypto has historically been thought to return significant profits in a short period of time. In this case, investors who skipped out on last year's bull run led by assets such as Bitcoin and Ethereum (ETH) may buy on the dip with the expectation that the sector will rally again.
This is one of the more risky reasons for investing in digital assets. In most cases, this strategy's success depends on an investor's ability to perfectly time purchases and sales.
With the development of new apps catering to the needs of retailers, the growth among investors has also been linked to the ability to acquire cryptocurrencies effortlessly.
Meanwhile, other institutional behemoths will likely take a back seat and wait to see how market trends unfold.
Potential roadblocks to investments
Because of America's innovative sector, it is essential to note that there are potential barriers. Most people have consistently avoided crypto due to factors such as complexity. A segment of investors continues to find the sector challenging to comprehend.
In the long run, supporters believe that the investment rate will likely increase because previous years laid the groundwork for building the necessary infrastructure.
Furthermore, digital currencies will likely be integrated into more sectors, such as payment systems. However, most Americans continue to be concerned about regulatory uncertainty. Notably, the White House and Congress are spearheading several initiatives to bring clarity to the sector.
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