As first published in The Q Review Summer 2021/22 Magazine.  Follow the link to Subscribe and receive your FREE copy each quarter!

Continued from Part 1…

As mentioned, I think you have to accept that what we are presently experiencing in relation to crypto and the like is to an extent a repeat of history. In that it is not dissimilar to a gold rush, oil rush, the dotcom boom even some property booms.

From that point of view, there is nothing new to see here.

And as we know with all such periods and events, there will be winners and there will be losers!

Generally the losers are the ones who never really understood it all, and often were the ones who couldn’t afford to lose.

We do have Community Members who have done very well, to date, arguably on paper (or on their phone screens) from what they consider ‘investing’ in crypto. We have others who have been caught out the same way inexperienced or under informed investors always do, they sold during times of unrest and falling prices.  Just like during the GFC.

So even if you come to a conclusion these technologies are the next big thing, who knows if the present ‘big’ currencies will be the ones that survive and win.

Certainly, over history, often it is not the originals, it is the second comings that truly succeed (AC current trumped DC current, Facebook trumped Myspace, Google trumped Yahoo and so on).

Bitcoin obviously has a very strong following, and there are a lot of people that have done extraordinarily well out of it thus far.

But personally I continue to struggle to see the underlying value behind it. It seems to solely rely on everyone agreeing to use and accept it and therefore agree its value. What happens if they no longer agree?

I will confess, with my very limited knowledge and understanding, I feel slightly more comfortable with Ethereum in contrast to Bitcoin given it seems to have a use case and the coin or token facilitates that.

This appears to give it an underlying demand which supports its value.

Of course there is a myriad of other cryptocurrencies and/or tokens with similar and also varying arguments for and against.

I know many of you reading this are waiting for some advice as to whether you should invest in crypto and if so which ones.

Sorry to disappoint but I will not, and cannot, give such advice and nothing in this article should be read as a recommendation to invest, or not to invest.

What I can advise however is as follows –

  • Investing in something you don’t understand is fraught, and really should be considered nothing more than gambling,
  • If you choose not to follow the crowd, and therefore choose to stay out of crypto investing, accept your decision and don’t lose sleep second guessing it,
  • If you do jump on the bandwagon, please, learn as much as you possibly can about what you are getting yourself into. And when you do, seek out varied sources of information and avoid ‘shiny new thing’ syndrome,
  • However, even then, recognise you are still pretty much gambling,
  • Traditional investing wisdom would suggest you should not invest anything you can’t afford to lose, meaning you should invest small and diversify,
  • Many of you will have heard me argue against diversification, however I only do so where you are fully invested (intellectually, emotionally as well as financially),
  • If this doesn’t apply to your crypto interest, stay conservative,
  • Even if it does, still be very careful,
  • If you lose, which many will, accept it was your choice and your decision, you gave it a go and it didn’t work out and move on,
  • If you win, maybe you were smart, but maybe you were lucky, either way, stay humble.

Ok, so the last thing I should address… Do I own cryptocurrencies?

The answer is no I do not (Editor: That was the case at the original time of writing The Q Review article).

If you do jump on the bandwagon, please, learn as much as you possibly can about what you are getting yourself into.

Having learned the hard way early in my investing career, I don’t like investing in things I don’t understand, it never works out, at least for me. And I am a terrible gambler, so I rarely do that either.

But I will confess the main thing stopping me over the past twelve months has been a lack of time and available energy to devote to taking the plunge.

I have felt for some time I would like to, and should have, taken the plunge in a small way. However, I have gotten half way through establishing my trading account on three occasions, and each time become bogged down in the verification process and never finished before other more pressing matters, like my role at CapitalQ, took my attention once again.

(Update: Since writing the original article, and prior to publishing of The Q Review Summary 2021/22 Magazine, I have started my ‘hands on’ education into crypto. As expected, it has been a wild ride, but from a pure trading/speculation point of view, opportunities abound!)