Is it the right time to invest in cryptocurrency? Here are the top tips from the expert

What is a cryptocurrency? In short, it is a digital currency created and used in a decentralized computer network. There is no central bank that can control or protect this. It’s virtual and price fluctuations can be fast and disorienting. Example? Bitcoin, the most famous cryptocurrency that is at the top of the investment, this Sunday showed a value of 23,268 euros… But it has already shelled out $69,000. For 10 years, the virtual currency managed to take 300,000%. Did you say volatility? This does not prevent them from owning 500,000 Belgians …

Banks are reluctant

“This is 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 shared simultaneously by all its 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 being centralized,” continues Harold Kinet. “It’s a bit of a taboo for big traditional finance. Banks are afraid that we will touch their goodwill and that we will end up borrowing money from the decentralized network. »

That the authorities are vague about cryptocurrencies is an understatement. Here is the answer that BNP Paribas Fortis gave to a question we asked about cryptomonies (Belphius didn’t even bother to answer us): “After warnings from the FSMA (Belgian financial policeman – Ed.) and the National Bank, Paribas Fortis advises against buying cryptocurrencies and encourages its customers do not buy cryptocurrencies through bank accounts. Clients can still carry out this type of transactions themselves 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 cryptocurrencies.

The market has been hit hard

This is clear and seems justified by the fact that the cryptocurrency market has been heavily shaken in recent months and has been bolstered by bankruptcies. Even Bitcoin and Ethereum, the values ​​that specialized sites place on top of investments that are well known and seemingly solid, have been shocked.

So we repeat the original question: is now the right time to invest in cryptocurrencies? “I don’t have a crystal ball, so I would say you need to tread carefully and start by getting good information about the projects behind cryptocurrencies, there are 20,000 more on the market. You have to take the time and form your own opinion. It might be interesting to see what influencers have to say about this… Unless they get paid to promote a product. It is also important to spread the risks. It is better to invest 100 euros for ten months than 1000 euros at once. As with all markets, we are never immune from 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 cartoons that criminalize cryptocurrencies. »

This does not prevent certain scams associated with these transactions, even if this does not apply to cryptocurrencies: as with any other investment, caution remains the mother of virtues.

“Healthy Collapse”

The fact that the market was interrupted, that there were high-profile bankruptcies, does not frighten the specialist too much. On the contrary… “It happened after the collapse of the TERRA blockchain,” explains Harold Kinet. “This is actually quite a healthy phenomenon, clearing the market and leading to the disappearance of crypto with very weak projects. In fact, even if there is a fall in value, it is important not to panic and look at your investments in the long term. »

There are exchanges for buying cryptocurrencies, a centralized system that may seem more reassuring to investors, Mr Kinet explains. If you use decentralized wallets, you will have to manage them completely, without any security system, with a private key that you have no interest in losing. In a sense, the price of total freedom. “One 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 pouring into this new ocean of freedom 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 enacted (effective 2024?), will require crypto platforms to obtain permits to operate in Europe (with solvency and access to liquidity obligations).

Politicians intervene

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

As its president, Georges-Louis Boucher, told L’Écho this Saturday in response to the FSMA warning, “People get into debt to invest in real estate. We are not going to stop them from buying a house on the pretext that they risk being unable to repay their loan.”

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