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Tag: Investment Behavior

  • How To Tell If You Are You a Normie?

    In the ever-evolving world of cryptocurrency, jargon and slang play a significant role in defining one’s understanding and status within the community. One term that has gained traction is “normie,” often used by seasoned crypto enthusiasts to describe newcomers or those less familiar with the intricate workings of the crypto world. This article delves into the characteristics of a “normie” versus a crypto OG (Original Gangster) and provides insights on how to determine if you fall into the former category.

    Understanding the Crypto ‘Normie’

    A “normie” in crypto terms typically refers to someone new to the cryptocurrency space or someone who has a surface-level understanding of digital currencies and blockchain technology. This individual might have joined the crypto bandwagon influenced by mainstream media hype or peer pressure without a deep comprehension of the underlying principles of decentralized finance (DeFi).

    Behaviors of Normies vs. Crypto OGs

    Investment Approach: Normies are often characterized by their cautious or conventional investment approach. They might stick to well-known cryptocurrencies like Bitcoin and Ethereum, hesitant to explore lesser-known altcoins. Conversely, crypto OGs, who have been in the space since its nascent stages, are more adventurous, diversifying their portfolios with various digital assets, including DeFi tokens and NFTs (Non-Fungible Tokens).

    Market Reaction: The cryptocurrency market is known for its volatility. Normies might react hastily to market fluctuations, often swayed by the FOMO (Fear of Missing Out) or FUD (Fear, Uncertainty, and Doubt) generated by the media. In contrast, crypto OGs usually exhibit a more measured response, relying on their experience and understanding of market cycles.

    Community Engagement: Normies may not be as active in crypto forums or social media discussions. They often rely on mainstream news for information, unlike crypto OGs who are deeply ingrained in the community, engaging in discussions on platforms like Reddit, Twitter, or specialized crypto forums.

    How to Tell if You Are a Normie

    1. Your Knowledge Base: If your understanding of crypto is limited to its price movements and you find blockchain technology concepts baffling, you might be a normie.
    2. Source of Information: Relying solely on mainstream media for crypto news is another hallmark of a normie. Crypto OGs often turn to niche blogs, whitepapers, and community discussions for their information.
    3. Investment Behavior: If your investment strategy lacks diversification and is driven by hype rather than research, this is a normie trait.

    Embracing the Learning Curve

    Being a normie isn’t a permanent label. The crypto world is welcoming and educational resources are abundant. Whether you’re a normie or aspiring to be a crypto OG, the key lies in continuous learning and staying updated with the dynamic landscape of cryptocurrency. Remember, every expert was once a beginner, and the journey from a normie to a seasoned crypto enthusiast is an enriching experience filled with learning opportunities.

  • Unveiling the Truth Behind Crypto Investments: Who Really Invests and Why?

    The following article is based on this paper:

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4631021

    Cryptocurrency has been a buzzword for a while, but who’s really diving into this digital gold rush? A recent study sheds light on the faces and factors behind crypto investments, debunking some myths and confirming some hunches.

    Who’s Investing? Contrary to popular belief, crypto investors aren’t just tech-savvy millennials. The study reveals a diverse group, spanning various income levels. However, it’s the high-income earners leading the charge, similar to trends in stock market investments.

    Why Crypto? The allure of cryptocurrencies isn’t just their novelty. Three key drivers emerged:

    • High Returns: The past success stories of cryptocurrencies have caught many an investor’s eye.
    • Income Changes: Interestingly, people tend to invest more in crypto following a positive change in their income.
    • Inflation Worries: With rising inflation concerns, many view crypto as a potential safe haven, a digital hedge against diminishing currency value.

    Crypto vs. Stocks: It turns out, crypto isn’t replacing stocks or bonds in investors’ portfolios. Instead, it’s becoming an additional playground. Most crypto investors still maintain traditional investments. But there’s a catch – crypto investments are more sensitive to market changes. While stocks may hold steady through ups and downs, crypto investments tend to ride the rollercoaster of market returns more closely.

    Geographical and Income Insights: From coast to coast, cryptocurrency investment is gaining ground across the U.S. And while all income levels are participating, the bulk of the investment is coming from the wealthier segment.

    The Early Birds vs. The Latecomers: There’s a distinct difference in behavior between early crypto adopters and those who jumped on the bandwagon later. Early birds have a unique approach, particularly during market highs, differing significantly from newer investors.

    Cryptocurrency may be the new kid on the investment block, but it’s playing by some old rules. Investors are approaching it with a mix of traditional wisdom and new-age enthusiasm. This study not only offers a clearer picture of who is investing in crypto and why but also how it’s reshaping the landscape of personal finance.