More than a decade has passed since the inception of cryptocurrency. Skepticism came in many forms and from many different avenues, but the investment platform remains strong and even continues to expand.

The curious entry of new, non-retail investors opting for crypto now has some financial theorists wondering if cryptocurrency could be on the verge of replacing the gold reserve.

The Rise and Rise of Cryptocurrency

Within the first few weeks of 2021, Bitcoin effectively broke every record high for crypto trading. These unprecedented activity levels created mixed reviews with investors. Analysts were surprised by some of the newcomers on the scene, including hedge funds and Tesla.

Even savvy investors felt a bit of uncertainty surrounding the latest trends and what they could mean for the future of crypto. Would traditional retail investors be pushed out of the market? Is the current bull market an anomaly? A bubble? A sign of what the future may hold? Most importantly, cautious investors want to know when enough is enough.

Measuring a Phantom

Establishing reliable data on the crypto market has not been an easy task for even the most seasoned advisors and analysts. Not only are the underlying investments difficult to accurately follow, but the investors are also temperamental. Determining the valuation with so many variables in play requires expertise that far exceeds industry standards.

Coupled with an extremely volatile trading history, the crypto market faces a litany of speculation from new and current investors. Skittish investors and day traders inflate gains and losses, making it far more difficult to gauge long term outcomes. A current behavioral risk stems from investor activity as the COVID-19 pandemic abates.

If non-retail investors continue to rapidly enter the crypto market just as retail investors pull back, the trend could see a quick upset in the balance of stakeholder volume.

Beyond the Bull

What this means for the bull market, earnings, and future activity depends on your perspective. Tax implications and volatility continue to sway investors toward or away from cryptocurrency. Traders have specific reasons for joining a particular niche or market, and that sometimes includes selling at a loss. Investor activity can be difficult to predict, but general trends develop over time and provide relatively reliable market indicators.

New investors are on the scene, and new currencies are also emerging. Several other currencies have joined the ranks and these newer options are splitting investor loyalties. Stock valuations, by nature, can be particularly detailed. Add in specialty data like that found in hedge funds or cryptocurrencies and you realize the depths required to create an accurate appraisal.

When it comes to decrypting the cryptocurrency market and associated trends, a valuation must be comprehensive and unbiased. Traditional statistics and behaviors must be proportionately compared to irregular factors introduced by stimulus packages and unexpected investors. If you need solid conclusions and trustworthy crypto valuations, trust the experts at Appraisal Economics.