In the digital age and virtual landscape, Bitcoin is more than just a form of money, James Haft, executive chairman of DLT, says. The cryptocurrency has catapulted into the public spotlight from around the globe, causing its value to surge. With the fixed supply and increasing demand, the price of Bitcoin increases. Some institutional players, as the currency leaks into financial markets, try to behave as trailing indicators—like lemmings—rather than leading indicators. This “fear of missing out” results in players trying to invest in things they presume are already “hot,” rather than creating something that’s “hot” in fear of risks.
“The fact that it's gaining in value is because it's gaining attention from people globally,” Haft said.
Fear and greed in the industry causes people to make irrational decisions, such as overzealous dropping when they think other people are profiting. This behavior can lead to a temporary bubble of overpricing, which results in a drop in the price.
“They grow against a background of fear and greed,” Haft said. “So, when you're afraid, you dump and you cause overzealous drops. And when you become greedy and think other people are profiting, you tend to pile in and it tends to be irrational.”
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Haft says what you’re seeing happening in the market right now is a “herd mentality” of people trying to chase the next best thing, which can cause governments and institutions to get involved when the markets get out of hand. Bitcoin has consistently been the best investment in the world for the last 12 years, Haft says, because the increased attention of the cryptocurrency has caused it to skyrocket in value.