Is it a good time to invest in cryptocurrency? Here are the top tips from an expert

What is cryptocurrency? In short, it is a digital currency created and used in a decentralized computer network. There is no central bank to control or protect it. It’s virtual, and price swings can be rapid and disorienting. An example? Bitcoin, the most well-known crypto-currency that takes a leading position among investments, showed a value of 23,268 euros this Sunday… But it has already posted 69,000 dollars. In 10 years, the virtual currency managed to occupy 300,000%. Did you say volatility? That doesn’t stop 500,000 Belgians from owning them…

Banks are reluctant

“It’s a fascinating topic with technology behind it. Web 3 (which will be the third era in the history of the Internet, editor’s note) uses blockchain technology,” explains Harold Kinet, CEO and co-founder of BE Blockchain. It is a technology for storing and transmitting information that is used simultaneously for all users and does not depend on any central authority.

This is exactly the principle of cryptocurrency. “A way to share information and value anywhere in the world without centralization,” Harold Kinet continues. “Which is somewhat taboo for big traditional finance. Banks are afraid that we will affect their goodwill and end up borrowing money on the decentralized network. »

The fact that the authorities have a negative attitude towards cryptocurrencies is an understatement. Here’s BNP Paribas Fortis’ response to a question we asked them about cryptocurrencies (Belfius didn’t even bother to answer us): “Following warnings from the FSMA (Belgian Financial Police, Ed.) and the National Bank, BNP Paribas Fortis advises against buying cryptocurrencies and encourages its customers do not buy cryptocurrencies through bank accounts. Customers can independently carry out this type of transaction through Easy Banking, taking into account the possible risks associated with cryptocurrencies. However, the bank does not provide advice or assistance in buying or selling cryptocurrency.

The market was very shaken

This is understandable and seems justified by the fact that the cryptocurrency market has been very shaken in recent months and bankruptcies have supported it. Even Bitcoin and Ethereum, values ​​that specialized sites put at the top of investments, are well-known and apparently reliable, have been shaken.

So we return to the original question: Is now the right time to invest in cryptocurrencies? “I don’t have a crystal ball, so I would say that you should be careful and start by getting good information about the projects behind the cryptocurrencies, there are still 20,000 of them in the market. You should take the time and form your own opinion. It might be interesting to see what influencers have to say about it… If they aren’t being paid to promote the product. It is also important to spread the risk. It is better to invest €100 over ten months than €1,000 all at once. As with all markets, we are never immune to a crash. It remains a very volatile market. In fact, the technology is still relevant, but the craze has created huge bubbles. In any case, we must move beyond the caricatures that criminalize cryptocurrencies. »

This does not prevent certain scams related to these transactions, even if it is not related to cryptocurrencies: as with any other investment, caution remains the mother of virtue.

“Healthy Collapse”

The fact that the market succumbed, that high-profile bankruptcies occurred, does not frighten the specialist excessively. On the contrary… “It happened after the collapse of the blockchain, TERRA,” explains Harold Kinet. “It’s actually quite a healthy phenomenon that clears the market and causes cryptocurrencies to disappear due to very weak projects. In fact, even if there is a drop in value, it is important not to panic and to look at your investments in the long term. »

There are exchanges for buying cryptocurrency, a centralized system that may seem more reassuring to investors, Mr Kinet explains. If you use decentralized wallets, you have to manage them completely, without any security, with a private key that you don’t want to lose. In a sense, the price of complete freedom. “We can imagine that in the future there will be more and more services to help the general public (…) The ocean of traditional finance is slowly flowing into this new ocean of freedom that is open to all. »

Politicians are beginning to take a serious interest in the market. At the European level, the MiCA regulation, which is in the process of being adopted (coming into force in 2024?), will require crypto-currency platforms to be authorized to operate in Europe (with solvency and access to liquidity obligations).

Politicians get involved

Then at the Belgian level, where PS and DéFI want more regulation, where Écolo links cryptoassets to the energy transition. Where MR puts forward proposals to facilitate the emergence of the crypto-ecosystem.

As its president Georges-Louis Boucher told L’Écho this Saturday, in the wake of the FSMA warning, “people are going into debt to invest in real estate. We’re not going to stop them from buying a home because they’re at risk of defaulting on their loan.”