To invest, or not to: That is the question for Cryptocurrency investors

1. Cryptocurrency is a controversial issue that some people see it as a lottery ticket while some people consider it as an investment.
2. Some countries, such as Qatar, have banned Cryptocurrency-related activities; some experts warn the possibility of misuse and crime.
3. Clear and safe investment plans are needed to protect one’s assets.

Some people see Cryptocurrency as an investment, while some people often compare it with gambling. Is Cryptocurrency another period of Tulip mania or is it a future digital currency of the world?

Before James Lee made 17 million US dollars by investing in Cryptocurrencies, he was a typical computer science student who likes to design various applications and programs. Just like other students at his age, he likes to read economic articles, finding opportunities to invest money in innovative ideas during his spare time.

He heard of Cryptocurrency while interning at an economics research center in 2017 and the decision to invest in Cryptocurrency changed his whole life. At the beginning, he barely knew what it is. However, as he saw a promising opportunity in cryptocurrency, he started designing a program that predicts the prices of various cryptocurrencies at different exchange markets.

After he invested money with the price prediction program and had made profits around 17 million US dollars in two years, James was not the same person he used to be in the past. Cryptocurrency allowed him to become a millionaire, from a student who used to get an allowance from his parents.

With the money that he made, he now lives in regal splendor. He lives in a luxurious condo that has the most spectacular views imaginable. He drives Audi that costs 120 thousand Qatari riyals and wears premium luxury clothes that an ordinary student or salaryman would never normally see or even imagine.

However, he stopped investing in cryptocurrency even though he could make much more money. He explained that it is still possible to make money out cryptocurrency but the value of Cryptocurrency fluctuates too much and it became more dangerous than ever.

“I do think that there are actually chances that you can make profit out of it,” Lee said, “however, since there are many big hedge fund companies and huge investors after the boom of Cryptocurrency in 2017, there is nothing you can do as an individual.”

In any case, the purpose of this digital asset was to perform internet-based financial transactions. However, in 2017 when the prices of various digital coins were significantly decreased, people recognized it as a bubble, just like tulips in 17^th century.

In 17^th century Holland, Tulips were considered as an investment that the price of tulips were significantly higher than other kinds of flowers. For instance, a bulb of Semper Augustus, one of the most valuable tulips, could afford a whole Dutch family’s living for a while. However, since Tulip itself was not a valuable commodity, the price went drastically down, resulting enormous losses for investors.  

In addition, some countries have banned the use of cryptocurrency because of the possibility that they can be used in crimes. For instance, Qatar has banned all the cryptocurrency related activities, although the country was regarded as the leader of the region.

Giovanni Bandi, the head of the asset management supervision team at the Qatar Financial Center Regulatory Authority, says that one of the reasons why Cryptocurrency got banned is because it can be used in money laundering.

“It is much easier to money laundering with Cryptocurrency,” Bandi said, “Financial Action Task Force (FATF)’s recommendation is not to allow Cryptocurrencies unless they are extremely supervised.”

It is true that Cryptocurrency can be used in a crime. It is also true that its prices is still lower than its peak in 2017. However, it seems that the values of Cryptocurrencies are increasing again. According to Financial Times (FT), digital assets such as Bitcoin, Ethereum and Litecoin have risen again in 2019. Specifically, “Bitcoin” has risen 10% and can be still exchanged with actual currencies such as US dollars at a market.

Cryptocurrency is still a controversial issue that its market has imperfect security procedures and its system has fewer restrictions, compared to the stock market. Theoretically, one can still make profits out of Cryptocurrency. However, if you do not have a clear investment plan, you will be much likely to become a victim of another capitalistic bubble economy in the world.