There’s a lot I don’t understand about cryptocurrencies. Where do you buy these things? Where do you spend them? What is a block reward or a DAO or a DEX or even a fork, the one having to do with blockchain, whatever that is, not the utensil?
But as the mother of a son who wishes he were a Bitcoin millionaire, there is one thing I do know: Being an aspiring crypto tycoon is not easy on the heart.
More than 6 in 10 crypto investors believe they’ll get rich, according to a survey by the financial website MagnifyMoney. Who can blame them? Wherever you turn there’s a college buddy or brother-in-law crowing about his good fortune, or a story about average folks who “got insanely rich off crypto,” as the New York Post headline put it.
The other day, as a proud uncle pitched me on an interview with his nephew, who “has been killing it on crypto these last few months,” I thought with pain about my son, just back from college, emerging from his clothing-strewn room and staring at his phone, distraught, as if he’d learned devastating news.
“What’s the matter?” I demanded, panicky.
Reader, brace yourself: He bought $100 worth of Dogecoin at 5 cents per coin, and — unwilling to lose so much money on a coin that started as a joke, and fearful it would drop in price — sold it for the same amount.
And now it had hit 65 cents. It was a $1,200 windfall that wouldn’t be his. “I can’t even ... ” he said, retreating back to his lair.
Let’s pause here to acknowledge that as obsessed as some people are with crypto — many of them young, male, and tech-y — other people, in many cases the parents of the obsessed, are baffled, disinterested, or suspicious. They know it’s there but it feels so very far away.
Even when they read primers — like “A Short History Of Bitcoin And Crypto Currency Everyone Should Read” (Forbes); or How Cryptocurrency Works for Dummies: History and Facts (Vave) — the information doesn’t stick. But it may be time to learn. In March, PayPal announced that users could pay for purchases using Bitcoin and other cryptocurrency.
Back to the crypto bros. Never mind that many only got into crypto during the pandemic to scratch the gambling itch when there were no sports to bet on, or that they don’t do a lot of “research.” Their days are spent in regret.
They didn’t buy Bitcoin or Ethereum or Dogecoin early enough. Or they did, but they didn’t buy enough. Or they panicked when prices dropped, and sold their holdings instead of taking advantage of the bargains and purchasing even more. To put it in meme terms — the preferred mode of scholarship for this crowd — you are supposed to “buy the dip.”
Their egos are tied to events out of their control. China calls for a crackdown on cryptocurrencies and their holdings take a hit. Or some reckless billionaire (Elon Musk) goes on a comedy show (”Saturday Night Live”) and jokes about Dogecoin, and it drops in value.
As Amy Castor, an independent reporter who is focused on cryptocurrencies and has a master’s degree in clinical psychology, put it: “Once you own some kind of cryptocurrency it messes with your mind.”
Investments have always been a source of stress, of course. But what I observed in my usually zen son was more than just a person who wished he’d invested more heavily in an index fund.
My maternal impression that crypto remorse is particularly intense was confirmed by experts, who told me that the cryptocurrency market is like the stock market on steroids.
Your investment can go up a ridiculous amount — at its peak in early May, Dogecoin had gained more than 26,000 percent over the previous six months, according to CNBC — and it can also go down a ridiculous amount.
The crypto world runs 24/7 and it’s right there on your phone. You could be at your own wedding reception, sneak a glance while the bride is smooshing cake on your face, and get honeymoon-killing news.
“If you invest in a stock and the price goes up and you sell it, that’s it. You don’t keep tracking that stock, and so you don’t realize, ‘Oh, maybe I should have held on longer,’” said Tom Meyvis, a professor at the Stern School of Business at New York University and an expert in consumer behavior.
But, he said, “With cryptocurrency it’s hard to avoid because it’s on the front page all the time.”
It’s also in group chats and subreddits. “People who invest in cryptocurrency often have friends who invest in cryptocurrency and they will tell you about how much it’s going up,” Meyvis said.
“The problem with social comparisons,” he noted, “is they provide asymmetric information. Your friends are bragging when it’s up and are quieter during the crashes.”
I would have thought that a recent collapse of the crypto market would make people who had been beating themselves up for not having enough feel good for a change.
But no. Because many people are tortured by “anticipated regret,” they’re instead stressed that if they don’t get in now, when the prices are lower, they will once again miss out, said Utpal Dholakia, a marketing professor and consumer behavior expert at the Jesse H. Jones Graduate School of Business at Rice University.
“If I don’t buy Bitcoin or Ethereum now,” he said, “and it goes up to $100,000, how am I going to feel?”
How am I going to feel?
For the first time, I thought about the question as it related to me. Why shouldn’t I get in on these riches, too? I called out to my son in the other room, “Buy the dip!” I yelled.