Nowadays, pretty much anyone with an email account who looks at their junk folder will see it brims with a constant flow of cryptocurrency emails promising easy (and quick) crypto wealth.
The cryptocurrency (CC) market seemed suddenly to light up during lockdown as retail-starved speculators set up a crypto wallet and had a punt on this rapidly expanding commercial sector. Some made enviable returns that helped to fuel the frenzy and drive up prices. But a bigger number probably saw losses.
Welcome to the crypto wild west, everyone!
Saddle Up, Let’s Take A Look
I won’t go into the mechanics of crypto assets or the implications and advantages behind decentralised blockchain ledgers. Not because they’re not fascinating but because there’s really no need.
The crypto market has developed to the point where it’s easy for investors to get involved without understanding the underlying tech. Although, I would argue that developing a working knowledge of this area won’t do any harm. This sector is now pretty much mainstream, and there’s plenty of high-quality resources to help would-be crypto buyers to dive in.
There are plenty of sharks too, so go carefully.
The fascinating point for me is that I love the idea of a decentralised, accessible currency that’s free from the influence of central banks and government interference. Maybe it appeals to the libertarian side of my nature allied to my hunch that the end is indeed nigh for traditional fiat currencies, perhaps within the next decade or two.
Look at El Salvador that in a controversial move, adopted Bitcoin as its national currency. Then there’s Lebanon, whose citizens are increasingly turning to Bitcoin as their faith in the Lebanese Pound ebbs away. These are precisely the circumstances in which people can use CCs to regain at least some control when they have lost faith in their leaders, their institutions and their national economies.
This, I think, will be a growing trend in the future and not just in unstable countries.
Show Me The Money
It’s easy to see the appeal of crypto assets to the everyday punter. Given the massive gains we have seen in the value of CCs over the last few years, it’s little wonder many are piling in.
Plus, of course, there’s the deluge of new currencies and blockchain entrants into the trading market, many of whom are as dodgy as a £3 note.
Let’s look at the original CC: Bitcoin, the first and still one of the best examples. Its price has surged over recent months, coming in at over $60k per in October 2021. Moreover, market analysts predict that by 2022 it could be worth double that. That’s one hell of a rise!
Of course, the journey to that price might be a heart-stopping ride. The crypto market is notoriously volatile, with huge swings being part of the ‘fun’. As a benchmark, Bitcoin is three times more volatile than oil and up to ten times as volatile as stocks and gold. Plus, where there’s little or no regulation, and everything relies on pure market sentiment, it’s always going to be a roller-coaster investment.
So I suspect plenty of shirts were lost over the last 18 months, with more to come.
In Or Out?
Well, first thing’s first, this is not trading advice, so don’t make decisions based on my thoughts. Do your own research, and don’t go all-in! That said, I think investing in a good quality CC, like Bitcoin or Ether, isn’t a terrible move as part of a balanced portfolio.
I’ve read analysis that if you have about 1% of your investments in a CC, it will represent about 3% risk of your total portfolio. So make of that what you will but always remember that CCs remain a highly speculative asset that could equally deliver big or bottom out.
We can all agree that the crypto market is here to stay. As new coins, NFTs, and decentralised trading become the norm, their underlying volatility and risks will settle and become somewhat more predictable.
Within a decade or so, we’ll all have a crypto wallet on our mobiles and start to enjoy the genuine freedoms this developing sector will bring to our lives.
I suspect we’ll also start to see more government, crime agency and legislative interference too.
For now, if you’re interested in getting involved, act cautiously, do your due diligence and don’t invest more than you can afford. Always ensure you use well-established CC traders to make your purchases.
That way, in the next few years, we might build a genuine alternative to traditional fiat currencies and have that little bit more control of our assets.
And, finally, definitely don’t answer one of those dodgy spam emails in your junk folder. That, I can guarantee, is the easiest way to lose your money.
Call my team today on 0161 917 7864 or email me at if you need future-focussed accountancy support or want to discuss your business and its investments, crypto or otherwise.