A small group of five students, including myself, under the lead of Ph.D. Suzana Brown, made a research on the average size of crypto investment. They tried to answer a number of questions before continuing the research. The main one being: ”Which are the main reasons for investors to enter the market?” To help answer the main question, we created some subquestions in hopes to get more dots with which it would be easier to connect.
Why was crypto investment chosen for the research?
We chose this theme because almost all members are active participants in a crypto market. Either with trading or just being enthusiasts of the technology and are regularly follow the news and forums like Bitcointalk or Reddit. With that, we share a common goal. To increase our knowledge of the crypto environment, the market and different forces involved in it. Together we can with less difficulty see some correlations and help each other reach sensible conclusions.
Answering the main question
If we take a look at the number of Slovene crypto investors. By some estimates, this number is moving around 55.000 which represents only 2,66% of the population of 2.065.890. But this percentage already shot us in the top countries by blockchain adoption.
If we look at the numbers gathered from research:
- Gender: 70% males, 14% females
- Age: more than 55% of respondents fall in the range of 18-38 years of age
- Education: 34% Masters degree, 27% Bachelors degree, 36% Associate degree
- Investors Yearly income: 22% up to 10.000€, 17% from 10.000 to 15.000€, 16% from 15.000 to 20.000 19% above 20.000
- Reasons for investing: 33% technology and profit, 27% technology, profit in philosophy, 31% profit
(Some numbers are below the 100% mark. That is because some, withhold to answer.)
With the data we gathered, the fundamental concept of supply and demand is clearly seen and its impact on the price. This is especially visible with cryptocurrencies such as Bitcoin, which has set the maximum amount of supply of 21M tokens and the incoming supply is cut in half every 4 years. So when the supply decreases and the demand stay relatively the same, this results in rising of the price. In an event that in the similar scenario, where demand rises, this causes the price to ”explode”.
Next conclusion refers to volatility. This is daily range between the high and low price in this case, currencies, and tokens. Volatility in cryptomarkets are extremely high in relation to the stock market, this is contributing factor and increases the risk. Breaking 20% barrier is not an unregular occurrence.
Following market volatility, we found out that many crypto tokens from the projects don’t have practical usability and some don’t even have any usability. Many of the projects don’t have prototypes ready and are in the idea stage of the development. Some companies failed to deliver on the promise creating a loss of investors funds. Making crypto investment a good choice primarily for the risk takers.
Last but not least, the risk. Cryptomarket is full of it. With that, I don’t just mean the volatility of the coins, covered above, but also scams, corruptions, Ponzi scheme and more creative ways are sure to come. This is especially hard to trace and characteristics of the blockchain don’t allow any mistakes. Once the transaction is made, it is irreversible. To get funds returned to you, at the moment, you don’t have control and are at the goodwill of the receiver. It is much easier to prevent and bypass this corrupt attempts than it is to reverse it.
Few words of advice
Because of the risk surrounding crypto investment in this relatively new environment is why carefully conducting research on each crypto project is essential. Including a live video call in the research itself is no overkill. For that reason, the investors better have thick skin when following the price, some are even encouraging not to follow it at all. It is much easier to prevent and bypass this corrupt attempts than it is to reverse it.