Bitcoin, the most widely recognizable cryptocurrency, has found an ally for itself in President Donald Trump. The Trump administration has brought new attention to one of the most widely misunderstood elements of today’s digital world with promises to create a strategic reserve of Bitcoin and end Biden era policies limiting bank’s abilities to hold crypto assets, all while young Americans are increasingly interested in crypto as an investment opportunity.
Bitcoin, created in 2009 by Satoshi Nakamoto, the pseudonymous writer of ”Bitcoin: A Peer-to-Peer Electronic Cash System,” is an intrinsically worthless asset that is backed by no government or centralized agency. The only monetary value assigned to it is by what those on the open market are willing to pay.
Currently, one Bitcoin, or BTC, is worth $96,965 on the open market. There are estimated to be a little over 19 million BTC in circulation, with a theoretical maximum of 21 million coins. To “mine” new bitcoins, computers solve complex equations for a share of the reward for encrypting a block.
Blocks make up the blockchain, a ledger of every past transaction of BTC, and are created every 10 minutes. Each block contains approximately 2,300 transactions at present and distributes 3.125 BTC once it is completed. Every four years the reward for solving the problems associated with a block is halved, which means it is estimated the last BTC will be mined in the year 2140.
Kyoung Tae Kim, a UA associate professor in the Department of Consumer Sciences recently authored a paper on cryptocurrency and social media.
“While our study did not specifically examine UA students, I believe they, like other young investors who heavily use social media, are increasingly interested in cryptocurrency investment,” he said.
As students become more aware of cryptocurrency as a potential investment, pitfalls and bad advice abound. “Social media significantly influences investment decisions, especially among young investors. According to the FINRA Foundation, about 60% of young investors use social media as an information source when making investment decisions,” Kim said.
BTC has fluctuated greatly in the months since Donald Trump’s election, increasing over 40% in the span of a month between November and December 2024, before decreasing 11% over two weeks after the announcement of tariffs.
“Despite its influence, social media carries risks, including unverified ‘finfluencers,’ conflicts of interest and impulsive decisions driven by social sentiment,” Kim said.
The California Department of Financial Protection and Innovation released a statement regarding the growing influence of these “finfluencers,” or influencers who share financial advice, some of whom do not disclose when they’ve been paid to promote an investment.
“Over the next four years, market trends, regulatory decisions and technological advancements will be pivotal in determining the trajectory of cryptocurrency adoption,” Kim said. “The increasing influence of digital platforms suggests that young investors will remain highly engaged with cryptocurrency markets.”
