Why People Use Crypto | MyForexSchool

People use crypto for different reasons. A worker sending money home needs different knowledge than a speculator trading tokens. This lesson covers the main reasons so you can find your own goal.

Investment and Speculation

Most retail buyers enter crypto to speculate. They buy hoping prices will rise. Speculation is normal. It helps markets function. But calling it investment is misleading.

True investment puts money into assets that earn rent or dividends. Bitcoin has no earnings. Its price goes up only when demand beats supply. That makes it more like a commodity than a business. The risk is very different from stocks.

Store of Value

Many people hold Bitcoin as a store of value. They see it as protection against inflation. The Digital Gold narrative treats Bitcoin like gold. It is scarce. It is outside government control. It can hold purchasing power over time.

But volatility is a big problem. An asset that can drop 80% is a poor short-term store of value. Long-term holders accept these cycles. They hold through them and wait for recovery.

Payments and Remittances

Sending money home is a major use case. A worker can send crypto to family in minutes. The fee is very low compared to banks. No middleman is needed.

El Salvador made Bitcoin legal tender in 2021. Results have been mixed. Local adoption has been limited. Price swings make everyday use hard. The IMF has raised concerns about financial stability risks.

Access to DeFi

DeFi stands for Decentralised Finance. It lets you lend, borrow, earn yield, and trade without a bank. Anyone with an internet connection can use it. No credit check. No application. No approval needed.

DeFi can produce big returns in bull markets. But bear markets have brought large losses, hacks, and protocol failures. The risks are covered in full in Course 05.

Ideological Conviction

A portion of the crypto community is motivated by belief, not just profit. They believe decentralised money is a social good. They believe financial self-sovereignty should be available to everyone. They see the current banking system as too concentrated in too few hands.

This view is sometimes dismissed as cult-like. It is better understood as the conclusion of people who have thought carefully about monetary history and financial exclusion. Whether you agree or not, understanding this argument explains why Bitcoin has such a committed long-term community.

EXAMPLE

WHY PEOPLE USE CRYPTO - SUMMARY

Key Takeaways

The dominant motivation for most retail crypto participants is speculation - honest acknowledgement of this is essential for appropriate risk management.

Bitcoin as digital gold - a store of value and inflation hedge - is an intellectually coherent case weakened by significant short-term volatility.

International remittances are the most immediately practical real-world use case - fast, cheap, permissionless cross-border transfer.

DeFi enables permissionless financial services but carries significant technical and protocol risks.

Ideological conviction - financial sovereignty and censorship resistance - is a genuine and serious motivation for many of crypto's most committed participants.

KEY TERMS

Speculation

Buying an asset primarily in expectation of price appreciation - the dominant motivation for most retail crypto participants.

Digital Gold

The narrative positioning Bitcoin as a store of value analogous to gold - scarce, durable, portable, and outside government control.

Remittance

Money sent by a worker in one country to family in another - a significant use case for crypto given its low cost and speed compared to traditional wire transfers.

Self-Sovereignty

The principle that individuals should have complete control over their own financial assets - without dependence on any institution.

HODL

Crypto community slang derived from a misspelling of "hold" - the strategy of buying and holding long-term regardless of short-term price movements.