The rise and fall of cryptocurrency


Photo André François McKenzie via Unsplash

Some Redhawks have been investing in different means of cryptocurrency.

Rin Ryu, Staff Reporter

Interest in cryptocurrencies or crypto has boomed in popularity, with celebrities endorsing investing and more sites accepting cryptocurrencies which are no longer the realm of adventurous investors as students are now dealing in this digital financial entity.

“My main assets in crypto are currently Ethereum and Bitcoin although I invest way more heavily in Ethereum,” senior Charlie Zhang said. “I invest in crypto because I really do believe in the long-term value and function of crypto as a concept. Our world is constantly becoming more technologically advanced and I don’t see why our monetary system won’t evolve as well in the future.”

The market surrounding non-fungible tokens, more popularly known as NFTs skyrocketed during the early months of 2021, reaching its peak in March. But like any financial system, there are some volatile components, especially NFTs which make Zhang leery.

Zhang believes that while most NFT projects could lose value relatively quickly, the best projects are surrounded by a strong community and development team.

“A lot of NFT projects are quick money grabs that are simply given artificial value by short-term hype that can die out anytime, thus crashing the value of the project,” he said. “The key is to identify the best projects surrounded by a strong team and community, and those are the ones I try to invest in.”

Fortunately for crypto investors such as Memorial junior Jackson Price, cryptocurrencies, such as Bitcoin can still reap monetary rewards. 

“I really only invest for personal gain,” Price said. “So, investing in Bitcoin reaps a lot more profits compared to currencies like NFTs which burn out relatively quickly.”

One of the downsides of investing in cryptocurrency is the high loss risk due to the lack of ownership of crypto. However, Price believes that the end product is more important than the risk associated with it.

“Although there is a chance that something may be lost, I still invest because of its profit,” Price said. “So for me, the reward of cashing in outweighs the risks.”

According to Zhang, investing as a whole is a risk, but by using his knowledge of the market, he is able to confidently invest.

“All investing comes with a risk,” he said. “However, I believe that currencies such as Ethereum and Bitcoin are relatively low-risk due to their large market volume. Since their value is easier to identify in relation to real-world trends and developments, I can make investments that I’m confident in. I truly believe in the importance of investing regardless of what form, so cryptocurrency is just another way I invest my money.”

However, not everyone supports this new currency due to its environmental impact. Activities such as cryptocurrency mining, are very energy-intensive. Bitcoin, one of the most popular currencies, is estimated to use about 2,100 kilowatt-hours per transaction; an amount of energy equivalent to what an average U.S. household uses in 75 days.

For environmentalists such as sophomore Vibha Immedisetty, this form of currency causes concern.

“The amount of energy that has to be used to obtain crypto is insane,” sophomore Vibha Immedisetty said. “Super popular cryptocurrencies like Bitcoin generate a bunch of greenhouse gas emissions.”