By Julia Yan
Both demand and criticism of cryptocurrency is increasing since 2017, making knowledge and research critical at this stage.
Despite the world of cryptocurrency having its ups and downs, three eager university students in Sydney encourage other young people to jump on the crypto craze.
22-year-old Alan Ng, who is currently studying a Bachelor of Science in Information Technology, accidentally discovered cryptocurrency while scrolling through his “usual OzBargain deals”. It was July 2017 when he stumbled across an advertisement linking to a forum about XRP (Ripple), a technology that acts as both a cryptocurrency and a digital payment network for financial transactions.
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.
“Yes, I did wish I pulled out earlier at the peak but I thought, if it rose that much it would probably continue to rise. Guess I was wrong,” said Ng.
“But you can see the same correlation between start-ups and crypto. [With] start-ups, it most likely won’t succeed but you believe in the project so that’s why you invest in it.”
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. In comparison, the Australian sharemarket has increased by 130,000% in over 140 years.
“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,” said Ng.
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,” he said.
As the total value in cryptocrruency continues to increase, so do hacks and scams. However, like Ng himself, most of his university friends continue to invest in some form of cryptocurrency, especially those studying commerce, IT and engineering degrees.
Che Sheng Bong from University of Melbourne has been investing in Bitcoin and Ethereum since November 2017 thanks to the influence of his best friend.
Bong started by investing only a few hundred dollars and was up to 70% in less than a month so he decided to put in up to one thousand Australian dollars.
“My investment went up 100% … There was definitely a fear of losing money but I didn’t invest an amount that I wasn’t willing to lose,” said Bong.
“Of course I do have a fear of being hacked and probably has made me hesitate putting more money in but there are ways around it. Number 1 way right now is to store your cryptocurrencies in an external drive.”
Regarding the crash in late 2017, cryptocurrencies have gained high traction due to wide media coverage. Both students believe that technology can change the way how societies operate beyond cryptocurrencies and no one is sure where it will take us.
“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.
Many experts believe it isn’t a healthy mindset to take a gamble and expect quick returns. Rather, young people including university students should do their own research and familiarise themselves with how cryptocurrency work.
Ng predicts another bitcoin bull run in 2018 to be “a pretty conservative view according to a lot of people on Reddit.”
Unlike Alan, Bong “doesn’t think Bitcoin is the best cryptocurrency in terms of its technology because other cryptocurrencies have done iterations of Bitcoin that aimed to improve its technology.”
For students, Bong recommends Ethereum because it allows decentralised Apps (dApps) to be run on the Ethereum platform.
An Atlas Trend panel of investment industry experts on 15th Thursday March 2018 shared their insight and skepticism towards cryptocurrency, particularly bitcoin. Andrew Birmingham, co-founder and editor-in-chief of Which-50 Media, strongly recommended investing in Blockchain technology rather than crypto coins.
“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.
This article is sub-edited by Claudia Chiu.