Colin McKnight
Up. Down. Up. Down. Way, way down. Every time I turn on the news, it seems that the cryptocurrency market has completely changed course since the day before. This has happened so often recently that it makes sense why people might label cryptocurrency as “unstable” or “volatile.” However, one thing that has certainly been on a continuous upwards surge is its popularity.
It’s been a subject on everyone’s mind. But, it’s been a tricky concept to fully grasp. Just trying to explain this new market to my inquisitive parents left me confused and at a loss for words several times. Despite the ignorance of myself, my parents, and plenty of others I’m sure, lucky and knowledgeable investors have found success and strong returns from the market because of their expertise in cryptocurrency, which shows that there are successful tactics and methodologies for finding wealth in cryptocurrency. Others, however, haven’t been so lucky.
Yes, it’s true, as CoinCodex reported, that many cryptocurrencies like Bitcoin are up more than 15 times in value from last year (at least, they were when that article was published.) However, I also know that, as the New York Times reported, when Forbes tried to compile a list of the top 10 cryptocurrency billionaires, almost all of them could no longer be considered billionaires at the time of publication due to a massive crash just days before.
Thus, the big question is whether or not such an unstable marketplace has a place on a university campus. But to answer that, first we need to discuss the sustainability of cryptocurrency. While this market has been around for several years now, this past year has been its first in the public spotlight, and where its met some of its biggest successes and bumps in the road. As I mentioned earlier, news outlets have been flooded with headlines of cryptocurrency plummets and turnarounds in just the past few months, the results of which have left many investors either rich or devastated.
Richard Warr, professor of finance here at NC State, is still uncertain about the direction that the cryptocurrency market is currently headed: “I think that there is just a huge amount of uncertainty about what [cryptocurrency] is actually worth. In terms of whether its gone up or down, I have no idea, but I think it’s going to continue to be extremely volatile.”
Warr is not alone. In an interview with TechCrunch, Darden School of Business professor Peter Rodriguez also expressed reservation about labelling the fledgling currency as a future success or failure. “It could all implode, of course, and that’s not unlikely” Rodriguez said. However, Rodriguez went on to add, “The real question isn’t whether Bitcoin will falter, plummet or take us all on a crazy ride, it’s whether it will actually survive its inevitable test. If it does, even at very low values, it will change the way we think about stores of value, finance and the independence of the virtual economy.”
That brings us back to cryptocurrency and NC State. It seems pointless to try and introduce some form of cryptocurrency as a possible payment option here on campus. Most of us already use our Wolfpack One Card to make our most common type of purchases, meals, along with always having it at the ready to rent out books and enter buildings. However, if enough students speak up, then administration might listen.
What’s less likely than that, however, is the chance of cryptocurrency being taught in current economics classes. On whether or not there are plans to introduce cryptocurrency courses into NC State curriculum, Warr put it bluntly: “No.” He added, “Most finance academics would not consider cryptocurrencies investable as a class; it’s a speculation.” He went on to compare the current state of cryptocurrency to the greater fool theory and the 17th century phenomenon known as Tulip mania in which thousands purchased Tulip bulbs as prices soared only for that market to crash.
The truth is that I am definitely not an expert on cryptocurrency. I know the basics, and the need-to-know history, but I can’t talk jargon with the experienced or predict any market shifts. But one thing I know for sure is, as both previously quoted economists stated along with numerous others, that the market is almost comically unstable.
Therefore, it is advisable to most college students to hold on a little longer before jumping on that seemingly lucrative bandwagon, because who knows what tomorrow has in store for the fragile market. Experts don’t even seem confident that cryptocurrency might make it out of the “trend” phase. Of course, many cryptocurrencies already have quite a few years under their belt, but it’s unclear what the future holds now that it’s the talking point in economics.