The Bitcoin price had a particularly volatile period in April. It hit a record high of more than $64,000 on 14 April but plummeted to below $50,000 a week later.<\/p>\n
Reitz said even with its drop to below $50,000, Bitcoin was still up 72% for the year to date.<\/p>\n
\u201cPeople often forget that. We\u2019ve been in extreme greed territory for quite a long period now,\u201d he said.<\/p>\n
The recent correction is well within the bounds of the typical volatility that investors have become used to in the Bitcoin market.<\/p>\n
\u201cIf we look back to 2017 \u2013 during the previous bull run \u2013 we saw several 20% to 30% drawdowns over the course of that year,\u201d Reitz said.<\/p>\n
![\"Marius](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2021\/03\/Marius-Reitz-1.jpg\")
<\/a>Luno Africa GM Marius Reitz<\/p><\/div>\n
The COVID-19 pandemic, financial crisis, and fiat currency fluctuations have created a perfect storm for cryptocurrencies.<\/p>\n
\u201cWe see this not only in the price of Bitcoin, but we see new retail investors buying Bitcoin as an inflation hedge,\u201d he said.<\/p>\n
\u201cSome gold investors are now also taking up small positions in crypto. It\u2019s not a case of Bitcoin replacing gold, but I think over time we\u2019ll see that flip and a new distribution channel will be created.\u201d<\/p>\n
The uptake of cryptocurrencies is also fueled by companies like Paypal and Venmo entering the market.<\/p>\n
\u201cThere\u2019s still a strong demand. We\u2019ve seen better distribution, easier, and safer access to Bitcoin. We still have lots of momentum,\u201d Reitz said.<\/p>\n
The rapid rise of Bitcoin \u2013 from under $4,000 in 2019 to over $60,000 in 2021 \u2013 has created tremendous interest in cryptocurrencies.<\/p>\n
![\"Bitcoin](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2021\/04\/Bitcoin-price-chart-640x284.jpg\")
<\/a>Bitcoin price chart<\/p><\/div>\n
With Bitcoin making headlines, many first-time investors see it as a quick and easy way to make money.<\/p>\n
As a result, there is a lot of greed in the cryptocurrency market.<\/p>\n
\u201cMany first-time investors – people who have never bought shares or any other investments – are entering the crypto space and putting in money,\u201d he said.<\/p>\n
This is particularly true in emerging markets like South Africa where Reitz noted they are seeing a lot of first-time investors.<\/p>\n
There are many speculators which Reitz said can be classified as \u201cthe greed side\u201d.<\/p>\n
\u201cWe see people buying a set amount of Bitcoin on a monthly basis on payday\u2026 and then more sophisticated buyers as well,\u201d he said.<\/p>\n
\u201cIt\u2019s certainly a mixture of greed \u2013 people wanting to make a quick buck in the short run, and they burn their fingers \u2013 and investors taking small positions in cryptocurrency,\u201d he said.<\/p>\n
Reitz said the greed cycle is driven by the fear of missing out.<\/p>\n
\u201cIt\u2019s people hearing about crypto over the radio, reading about it in the news \u2013 but they don\u2019t understand the technology behind it. They don\u2019t understand the risks involved,\u201d he said.<\/p>\n
\u201cBecause cryptocurrency is fairly easy to access people started buying it through word of mouth and didn\u2019t understand the risk.\u201d<\/p>\n
Reitz’s advice to first-time investors is simple – don\u2019t invest money in Bitcoin that you can\u2019t afford to lose.<\/p>\n