It won’t surprise many to learn that from an investor, or more correctly from a speculator or punter’s point of view, cryptocurrencies stink! And while the collapse of the price explains that, there are numbers to show just how much Bitcoin and its rivals are on the nose.

The Australian looked at the numbers from a market-watching outfit called Sensor Tower, and the news isn’t good for anyone holding cryptocurrencies hoping for a price turnaround any time soon. It has led to the technology editor at The Australian telling us: “The hype around crypto among Australian investors is dying out, with overall crypto smartphone application downloads down 72 per cent in 2022 from 2021, while the top-ranked app CoinSpot is down 82 per cent.”

In case you’re not in the new age tribe that has gone long Bitcoin, Ethereum or the others, you download an app in order to play ball with the crypto-world. So those falling downloaded numbers are another way to assess how unpopular cryptocurrencies have become.

Of course, the price of Bitcoin shows the pain that these would-be moneymakers are going through right now. And that pain would be more intense for those who jumped into this area of speculation believing Bitcoin was like gold, being a potential safe haven when global financial markets went into wobble mode and sold off.

Many believed the experts (who really were influencers undoubtedly talking their own books) who kept telling us we’d see $US100,000 by the end of 2021. The chart below shows how that big call worked out.

Bitcoin USD

“Crypto app downloads are fundamentally in lock-step with the value of Bitcoin, so any market fluctuation has a direct impact on consumer behaviour,” explained Eugene Du Plessis of Sensor Tower.

Coinspot and Binance are the most popular apps/platforms in terms of usage. Those with the app already continue to transact but it’s the new potential players who are giving cryptocurrencies a wide birth.

Du Plessis thinks this app download problem for cryptocurrencies is temporary. His organisation actually forecasts that Australia will be the fastest grower for crypto apps, with the market expected to be valued at $7 billion by 2026.

The ninth most popular app locally is eToro. It has reacted to the lack of interest from new crypto-players by cutting back its workforce. This is a real indicator that both cryptocurrencies and stocks like Tesla, Meta (and others in the IT and other tech spaces) are often bought by younger investors, who really play like speculators and behave triblly by getting in en masse and getting out with the same gusto.

This group has added volatility to stock markets. I suspect these big ups and downs won’t go away, given this new breed of market player now has a taste of making money the easy way from the Coronavirus crash, which then saw the market bounce back faster than ever before.

Now they’re learning that speculative trades like Bitcoin can really hurt. I also suspect that when tech stocks make a comeback, Bitcoin, Ethereum and the more popular cryptocurrencies will ride higher again.

Younger people lose 10% of their income to super so if they want to build wealth that they can access before they retire, they need to build savings possibly to buy property. And because bank deposits offer little help with low interest rates, the stock market and cryptocurrencies have become popular.

I can recall interviewing an older fund manager who was really annoyed that so many new investors had piled into beaten-up quality stocks that he wanted to buy for his fund after the Coronavirus crash. However, they’d become too expensive too fast because of the arrival of this tribe of young online traders.

These people might go quiet when stocks get slammed (like they are now) but when positivity returns, I’m sure there’ll be another big rush for hot stocks and the likes of Bitcoin.

While I don’t like the vulnerability of cryptocurrencies, I can see speculators and traders getting in once tech stocks start rebounding more convincingly later in the year.