Australian bitcoin investors are refusing to be spooked by the cryptocurrency’s wild volatility, saying its steep drop in value was a “healthy step” in the virtual currency’s brief history.
Bitcoin – the world’s largest digital coin – fell below $US10,000 ($A12,500) on Wednesday, continuing its month-long slide. Bitcoin peaked in December, at nearly $US20,000 but has since dropped by 50 per cent.
Wednesday’s price drop was sparked by a record sell-off after the South Korean government flagged a crackdown on cryptocurrency trading. South Korea is one of the world’s biggest cryptocurrency markets.
Bitcoin is one of nearly 1400 different types of cryptocurrency. China has also recently flagged a crackdown on bitcoin trading while Australian authorities want to follow Japan’s lead and regulate cryptocurrencies.
“I actually don’t quite care [about the volatility], believe it or not,” said Omar Ma, a 19-year-old computer science student from Melbourne.
He bought into bitcoin with his mother a year ago and the pair have recouped their investment but continue to invest their “considerable” profit. They aren’t bothered by Wednesday’s drop in value.
“I just think, hey, ‘it’s still more valuable than what I bought them for’.”
He said that despite the recent volatility he expected bitcoin to continue to grow in the long term because it is a finite currency.
Mr Ma said he’d been trying to get his mother to invest with him for the five years prior, but couldn’t convince her that bitcoin wasn’t a scam until a year ago.
“My mother regrets calling bitcoin a scam,” he said.
Another young bitcoin investor – 23-year-old commercial property sales assistant and recent university graduate John Mulqueeny – also said he isn’t spooked by recent volatility.
“I bought bitcoin on the assumption that it was a long term thing, not short term,” Mr Mulqueeny said of his sub-$5000 investment.
There’s a lot of people out there who have been in the market for a long time who see this as a badly needed correction.
“I bought it because people at work were getting on it and the research I did on it convinced me.
“I decided I would buy it and not get caught up in checking it every day. I put my money in and said ‘look it’s my first investment, it’s a good lesson for me’.
“I’m committed to ride through it, I want to see what it’s worth years down the track.”
Brisbane-based lawyer Tae Royle does the majority of his financial dealings in bitcoin and hasn’t carried cash for a year.
When he and his group of friends go to dinner, for example, they use bitcoin to reimburse one another for the bill.
Mr Royle said the rise of altcoins (cryptocurrencies that aren’t bitcoin) had contributed to cryptocurrency valuations becoming “wildly out of kilter”.
He described the recent drop in bitcoin value as “a very healthy step towards restoring a more normal market”.
“There’s a lot of people out there who have been in the market for a long time who see this as a badly needed correction,” Mr Royle said.
“It’s a cleansing process in terms of clearing out some of the altcoins that have achieved very high valuations without the appropriate level of due diligence being applied to them.”
He pointed to Wednesday morning’s collapse of BitConnect as the “absolute epitome of that”.
Crypto-currencies have proven volatile. Photo: Chris Ratcliffe
Anthony Colangelo – http://www.smh.com.au/business/markets/currencies/i-actually-dont-quite-care-australian-bitcoin-investors-hang-tough-20180117-h0jot6.html