US crypto market follows "herd-like behavior" in top buying: JPMorgan

JPMorgan Chase & Co. published a report titled “The Dynamics & Demographics of US Household Crypto-Asset Use.”
Findings suggest people buy more at high prices, thus suggesting “herd-like behavior.”
COVID-19 pushed 15% of US households into the crypto industry.

One industry can operate differently in different countries. The sentiments and spending capacity dominate society’s workings and similarly judge the industry’s performance. The latest report from JPMorgan Chase & Co. deduced the US crypto market, saying that it displays “herd-like behavior,” especially since many investors bought the top.

The change in demographics plays a major role in business dynamics. For example, Ford F-150, Dodge Challenger, etc. are very popular in the US; they are undoubtedly good vehicles. But they are not a huge success in the European market.

The report is titled “The Dynamics and Demographics of U.S. Household Crypto-Asset Use.” Its major findings were that a significantly large buying is specifically timed around significant price increases.

“A wide range of US households transferred money into crypto accounts when those assets were trading near their highest levels.”

However, these households incurred noteworthy losses in the slump in prices, which is going south throughout the year.

The report includes a sample size of around 5 million customers who actively checked their crypto accounts. This can be considered a reasonable number for a deduction. Further findings indicate that the COVID-19 pandemic is believed to be a primary driving force, pushing almost 15% of US households into cryptocurrency.

The report indicates that men, with their risk-taking nature, have engaged deeply in the market of cryptocurrencies. The group of younger individuals with higher incomes, & Asian individuals accompany them.

However, the findings indicate that the average holdings for most individuals are relatively on the smaller range.

The report does not accuse anyone; it just highlights the basic perception of US investors. Bill Gates has labeled the crypto industry 100% based on the “greater fool theory.”

The “great fool theory” is that there will always be someone willing to pay more for the same entity; the only need is to find them. Suppose one needs to sell a raw diamond found in a mine. If he tries to sell it in the local village market, he will surely not get the amount expected. He will then go to the city, where he is supposed to get a higher value. But if the person is smart enough to find the right buyer, he can be paid more than he had previously thought.

The same is the case with crypto currency; it does not generate cash flow on its own, nor does any industry tool. All the price actions are based on speculations and news floating in the market. Only interested people who know its worth and believe in the technology are still positive about its future.

Also, any entity is bought more by the general audience when there is hype around it. Similarly, when the price of BTC, or a coin or token, gets to a higher range people are tempted to buy the asset. Thus proving the “herd-like behavior.”

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing