Cryptocurrency is a rising trend for students

Cryptocurrency+is+a+rising+trend+for+students

Graphic by: Katelyn Laverde

Josh Gordon, Writer

Those interested in investing mainly focus on stocks, mutual funds and bonds; however, a new world has opened up in finance: Digital currency.

Cryptocurrency, an untethered currency accessible by all, has completely shifted the focus of finance. This brings decentralized currency, untouched by the government, to just about anyone with access to the internet. While it’s not so easy to understand, the many digital wallets available, like Coinbase and Binance, help just about anyone invest.

While crypto is obviously held up by its investors, there are several uses for it that could soon become part of people’s daily lives. One of these new uses include non-fungible tokens, or NFTs, which are digital items bound to owners through crypto. While they have been around for years, there has been a boom in demand over the past few months.

“I started seeing these weird pictures of these animated creatures all over my Instagram,” Marjory Stoneman Douglas High School junior LJ Russinoff said. “I did a little bit of research and figured out they were NFTs, and even my favorite celebrities were posting them.”

One of the most popular NFTs, “CryptoPunks,” was released in June of 2017. This simple digital picture collection of 10,000 total was released for free. The original NFT entailed that just about anyone with a crypto wallet was able to claim one.

Fast forward about three years, CryptoPunks are now the biggest NFT in the world with celebrities like Jay-Z, Logan Paul and Odell Beckham Jr. owning them. Even Visa has entered the space of cryptocurrency, making a CryptoPunk purchase of $150,000 on Saturday, Aug. 21, 2021. This investment quickly paid off. As of Tuesday, Sept. 17, 2021, average sales for CryptoPunks are at 122.87 ETH, or $421,719.33.

Nonetheless, the most unique part of the CryptoPunk collection is that each one is different. Some have rare qualities, making them sell for millions, with one even selling for $11.7 million. While the exact reason for the increased demand for NFTs is unknown, it is more than likely due to influencer involvement.

Multiple celebrities have made their NFTs their profile pictures on social media. They also tweet, post and share all about them. However, some believe that this causes artificial growth and that celebrities are promoting the product, causing the prices to rise.

A problem also found with NFTs is the difficulty of purchasing. In order to purchase, you must have Ethereum, a cryptocurrency, similar to Bitcoin, transferred to a browser extension called MetaMask, with more than just your purchase amount loaded in, as you will need to pay gas fees. Gas fees are transaction fees for crypto. Nevertheless, the prices shift based on how many people submit transactions at once.

When people submit transactions at once, it causes the release of an NFT product to lead to a “Gas War,” meaning the price rises to an extremely high price. For a newcomer to NFT, the product can be extremely challenging and risky. If your transaction fails, there is no way to get your gas fee back, causing people to lose thousands on a simple release. It requires a lot of learning and holds back many from trying.

“I have heard about [cryptocurrency] a lot,” junior Lily Galkin said. “I have a few stocks, but never really wanted to dive into crypto because of the time it takes to learn, and the risk.”

Galkin’s statement seems to be the common thought among many, and while it can be true, it is almost essential at this point for an investor to know about the currency they invest in.

Although it poses challenges, technology changes everyday. With a whole new area in finance, it’s absolutely necessary that any investor at least takes a look into crypto, as more and more people dive into it everyday.