Economics MDIA3010_18 MDIA3010Tue12.00 Technology

Hype or Hope: Young People and the Future of Cryptocurrency

Both demand and criticism towards cryptocurrency has been increasing since the beginning of 2017, making knowledge and research critical at this stage.


Despite the world of cryptocurrency going through plenty of rollercoasters during the last six months, it has caught the attention of not only investors, government institutions, financial companies but also eager young students in Sydney.

22-year-old Alan Ng, in his final year at the University of Technology, accidentally discovered cryptocurrency whilst scrolling through his “usual OzBargain deals”. It was July 2017 when he stumbled across an advertisement linking to a forum about XRP, otherwise known as Ripple.

He began his investment journey that July with investing $10,000 in XRP, worth 30 cents apiece at the time. In just six short months, Ng’s initial cryptocurrency investments in bitcoin, XRP as well as Ethereum have snowballed to over $300,000. At its peak, Ng made just over $900,000 USD.

“But you can see the same correlation between start-ups and crypto. [With] startups, it most likely won’t succeed but you believe in the project so that’s why you invest in it,” said Ng, currently studying a Bachelor of Science in Information Technology.

The cryptocurrency concept was founded by an unknown person or persons under the pseudonym “Satoshi Nakamoto” after the 2009 Global Financial Crisis.

The price of bitcoin has increased more than 66,000% in the past 7 sevens of existence. Contrarily, the Australian sharemarket has increased by 130,000% in over 140 years.

BTC prices advanced 756% since the start of 2017 (Source: Coinmarketcap)

Like many people who invested in cryptocurrencies relatively early on, Ng knows that his profits are partially owed to a case of good timing. Since the very beginning, his primary resource offering advice on how to invest in cryptocurrencies was the forum Reddit as well as Youtube tutorial videos on crypto.

His main advice towards young people such as students is to tread carefully and only invest as much as one is prepared to lose and to “invest in what you are interested in.”

“Best way to learn is to lose something … you get a lot of experience out of it. And as a university student, you always have more opportunities to make money anyways,” said Ng.

“In cryptocurrency you get better odds than gambling because at least you don’t move your money and secondly, it can always go up in a moment’s notice.”

However, Ng says that making smart investments in cryptocurrencies requires more skill than just a blind gamble. Pure speculation is not enough to win in the cryptocurrency game. From the very beginning, research has always been key for him.

“Just like any other investment, you should do your research. Would you buy a house that’s pretty cheap that’s in the middle of nowhere in Sydney or would you rather do your research and check for more houses that’s near the Inner West, and invest in that? Same concept, do your research,” said Ng.

As the total value in cryptocurrency continues to increase, so do hacks and scams. However, like Ng himself, the majority of his university friends continue to invest in some form of cryptocurrency, especially those studying either commerce, IT and engineering degrees. One of Ng’s close friend who is also 22 years old, makes $100 per day doing crypto-mining from home.

“If you’re a university student, if you want to put everything you have, go for it. But, you should have enough money to survive at least,” said Ng, “…During this time, I can always make it back. Even though I lose the entire value in Australian dollars or USD, I will still have that value in bitcoin.”

With an increase in interest comes an increase in scams, and the Australian Competition and Consumer Commission (ACCC) is urging consumers to be vigilant. Over the past few months, scams have become more and more sophisticated, including pyramid schemes and phishing scams. In October 2017, the ACCC received 245 reports of bitcoin-related scams with loses totally $92,000.

An Atlas Trend panel of investment industry experts on 15th Thursday March 2018 shared their insight and skepticism towards cryptocurrency, mainly bitcoin. One panelist, Andrew Birmingham, co-founder and editor-in-chief of Which-50 Media, strongly recommended investing in Blockchain rather than crypto coins.

AtlasTrend 2018 Investment Trends Panel (Photo: Julia Yan)

“The whole cyber currency thing, or cryptocurrency thing, I actually think there is a trend there somewhere … I don’t know how that plays out but I don’t think it’s that a particular coin is worth investing in over another coin, I think that’s going to blow up,” said Birmingham.

When it comes to investing and cryptocurrency as a whole, Birmingham says the most crucial question we need to ask ourselves is whether or not a particular trend is sustainable and if there is an underlying incremental demands from the public.

“I guess the final point I want to make is general bubbles are systaltic, when they pop they take the system out, right?” said Birmingham.

“I don’t think anybody really anticipated the crash unless you started investing in January 2017 because the same thing happened the year before and the year before that,” said Ng, when asked about the crash in January 2018.

According to many expert’s advice, it isn’t a healthy mindset to take a gamble and expect quick returns. Rather, young people such as students should do their own research and familiarise themselves with how cryptocurrency work.

Furthermore, student Ng predicts another bitcoin bull run in 2018, “a pretty conservative view according to a lot of people on Reddit.”