AVERSION TO TRADITIONAL STOCK MARKET & APPETITE FOR CRYPTO

Recent studies put stock market capitalization above 100 trillion compared to crypto which is just around 2 to 3 trillion $

While Stock market represent significant portion of global economy, crypto consists of decentralized digital assets which are not connected with any company or the government. However, it is a buzzword in social media. Origin of Crypto may have differing ideologies viz. systemic & societal short coming of traditional financial system to privacy & decentralization for empowering individuals or efficient cross border transactions and even distrust of centralized authority.

Being a new concept, the volatility variation is high & there were stories of high gains & high losses. Govts around the world started to analyse & implement ways of controlling & taxing crypto transactions. The latest study suggests that though the volatility of Crypto is still high, the trend seems to align with market economy. This is mainly because of improvements due to learning curve through experience & exchanges through social media

There are many aspects of this increasing popularity & let us discuss a few important things

1. FOMO: India has the largest number of crypto owners in the world and it is because of social media. There may be hype & actual sharing of success which causes ‘ Fear Of Missing Out’, especially on the tech savvy who doesn’t see Investment as a Journey & but graves for instant gratification like video games

2. SOCIAL GROUP PRESSURE: See the difference in this new generation to old. Remember the days 2 to 3 decades back when people used to write daily happening in their diary & get mad, if someone reads it

Nowadays, they put everything on social media & gets mad, if not read by others

It is because the trend has changed to show off their successes, especially on latest trends. This leads to pressure on youngsters

3. ALLURE OF SOCIAL MEDIA: Real-time sensationalism & exaggeration of success for instant gratification, influences others to join exploring new opportunities.

Yes! India has the most number of users in Crypto & even the USA comes the next, though not in value terms.

Regulators around the world are trying to equate Crypto as a commodity & soon it will be a matured product & till that time an extra volatility compared to stock-market will continue. How soon is the question, which will be based on the technology & knowledge dispersion apart from regulatory frameworks.

In India even the stock markets witness a rise in speculative trading by newcomers. Please refer to the statement made by Mr Ashish Kumar Chauhan MD, CEO of NSE https://mayayai.com/whats-there-in-the-mind-of-mr-ashish-kumar-chauhan-md-ceo-of-nse/