Caution Needed on Cryptocurrencies

Cryptocurrencies are generating a lot of interest from investors but AMP Capital’s Shane Oliver is sitting firmly on the fence, for now.

It should come as no surprise that investors across Asia are keen to grab their own share of the action. Bitcoin the most recognizable of the digital assets and the market leader, has seen a near 2000 percent increase in value, outperforming traditional asset classes such as gold.

Digital currencies have been soaring this year, with a total value of almost $149 billion, according to website for tracking capitalization of various cryptocurrencies «CoinMarketCap

«No matter how many times its explained to me how it works I still struggle to completely understand it,» says Shane Oliver, AMP Capital head of Investment Strategy and Chief Economist.

Crypto Caution

«It might sound very exciting but when something goes up by that much over such a short period, I usually get cautious because sooner or later it will come back down the other side, added Oliver.

The rise in the popularity of cryptocurrencies and the tsunami of new entrants via initial coin offerings (ICO’s) in this space has triggered regulators to act.

Most recently China issued a top level warning in an effort to restrict their influence, while the Hong Kong regulator also chipped in with their own concerns.

Not Tangible 

AMP’s Oliver recommends that investors act with caution saying if you don’t understand what you are investing in, stay away.

«My view is that you have to go in with your eyes open,» says Oliver. «I would be a bit skeptical as I would be with gold, but at least with gold I can touch it, I can see it, I know where it is and what it is. Whereas with this, it’s out there in cyberspace.»

Souce: Finews