Why Did People Suddenly Invest in Blockchain?
In the past three months, stock RIOT surged over 500%, overperforming the market by over 100 times. If you have seen this madness, you might be wondering: what is happening? Well, it might be beneficial to first know what a blockchain is in the first place.
Let me brief on what a blockchain is in one sentence.
Basically, it is a way to document transactions between cryptocurrencies such as Bitcoin and Etherium.
Why are people suddenly investing in blockchain?
There are many causes, but the most predominant reason is because of Tesla CEO, Elon Musk.
Bitcoin spiked as much as 20% on January 29 from Elon’s addition of #bitcoin in his Twitter bio.
So what does this have to do with blockchain?
As I said previously, some cryptocurrencies require the blockchain to function.
Therefore, Blockchain stocks skyrocketed as much as 500% due to the price of Bitcoin.
But wait, blockchain stock RIOT dropped 56% in just a week. Why?
In the past week, Bitcoin and its similar stocks have been plummeting.
From what I know, two factors play into this: Bitcoin stock, and a bear market.
As everyone knows, cryptocurrencies are a lot more volatile than standard stocks.
Since Bitcoin dropped 18%, it is expected that blockchain stocks follow it.
Likewise, indexes such as S&P 500 and NASDAQ dropped an average of 4.5%, which is almost half of the average market return in just a week.
So should I buy blockchain stocks?
In my opinion, now is the best time to buy blockchain stocks.
The price can rebound back to what it was priorly, and it can even surpass that.
Basically, it is a safer investment than cryptocurrencies.
What should I take away from this?
Blockchain stocks are risky because they follow the cost of certain cryptocurrencies, and most are safer.
Good luck with the stock market; it can eat you up in just a few days!
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I am not a financial advisor, and anything I say should be taken with a grain of salt.