Young investors are beguiled by ‘altcoins’

Prices of bitcoin and various cash — cryptocurrencies apart from bitcoin — are displayed on a board operated by cryptocurrency trade Bithumb in Gangnam District, southern Seoul, on Wednesday. Bitcoin costs fell under 70 million gained ($62,600) on Wednesday. [YONHAP]

Investors hoping to make a fast buck are turning to various cash, cryptocurrencies apart from bitcoin, which have costs that typically skyrocket by a thousand occasions in a matter of minutes.
The draw back of other cash, or altcoins, is that their costs can plunge simply as rapidly.
On Tuesday, a brand new altcoin dubbed Arowana Token was listed on certainly one of Korea’s 4 main exchanges, Bithumb.
On its itemizing at 2:30 p.m, it began buying and selling at 50 gained (4.5 cent) per token, then soared to 53,800 gained by 3:01 p.m. That’s a 107,500 % rise in 31 minutes.
However, by 9:30 p.m., the token had misplaced greater than half its features and was buying and selling at 21,000 gained. At round midnight, the token jumped again to 45,000 gained.
As of press time on Wednesday, Arowana Token was at round 30,000 gained.
Bithumb introduced earlier this month that the token, developed by Arowana Tech, was issued for the sake of secure and straightforward gold buying and selling utilizing a blockchain-based gold buying and selling platform the tech firm is growing with Hancom With, which focuses on blockchain expertise and information safety. Hancom With additionally operates its personal gold trade, which it acquired final yr.
The token’s reference to gold buying and selling could have pushed up costs, however some analysts suggested warning.
“Investments in altcoins are slightly speculative,” mentioned Lee Jeong-hwan, an economics and finance professor at Hanyang University. “I doubt individuals truly knew the aim or perform of every altcoin after they invested.”
“Arowana Token is only one instance,” he mentioned. “Other altcoins transfer up and down by over 50 % in a matter of 20 minutes day-after-day.”
According to Lee, investors ought to understand altcoins have extra dangers than bitcoin, the main cryptocurrency.
“They are affected by their very own dangers, associated to every coin’s stability or its use, on prime of dangers associated to bitcoin,” he mentioned.
Hwang Sei-woon, a senior analysis fellow on the Korea Capital Market Institute, mentioned that whereas a sure degree of consensus has been fashioned on bitcoin costs, as massive institutional investors have joined that occasion, altcoins are far more unstable and dangerous.
“I feel these altcoins are changing into one thing like themed shares within the inventory market,” Hwang mentioned. “They soar when there is a matter associated to sure themes, then they plunge.”
Hwang mentioned there needs to be some sort of a authorized system to guard investors and make cryptocurrency buying and selling extra clear in Korea. Then altcoin buying and selling may turn into safer.
Despite the dangers, nevertheless, Koreans of their 20s and 30s are searching for quick earnings from cryptocurrencies as rates of interest stay low at banks, and costs of residences have risen too excessive to save lots of for.
Seoul’s important bourse Kospi soared from as little as 1,400 to over 3,200-mark in lower than a yr, and that generated a variety of enthusiasm for equities. But now younger investors are turning their sights to cryptocurrencies.
According to information from the Financial Services Commission launched Wednesday by the workplace of Rep. Kwon Eun-hee, flooring chief of the opposition People’s Party, individuals of their 20s accounted for 32.7 % of newly registered investors on the nation’s 4 main cryptocurrency exchanges — Bithumb, Upbit, Coinone and Korbit — within the first quarter of this yr. People of their 30s accounted for 30.8 %.
BY KIM JEE-HEE   [[email protected]]

Recommended For You

About the Author: Daniel