Cryptocurrency has long been pitched by its enthusiasts as the beginning of a new world financial order – a factor which may historically have scared more traditional retail market investors away.
But neither traditional markets nor cryptocurrencies seem to be going anywhere any time soon, and when you’re looking at volatile but seemingly upward-trending price charts like that of Bitcoin, the allure of the lucrative digital currency space as an investment is clear.
Perceptions are changing too – anecdotally, the streets of Perth have recently seen an influx of crypto-related advertising on bus stops and signage. Border restrictions being what they are, the anecdotes available to this writer are limited, but surely the WA capital is not alone in this.
In the eyes of some, such as European financial tech firm YouHodler editor-in-chief Anthony Cerullo, the place cryptocurrency holds in the investment world has evolved from the conquer-all attitudes of its early days.
“It’s a very controversial topic,” he said.
“You’ll meet a lot of cryptocurrency purists, as I call them, who believe that cryptocurrency is the be-all, end-all solution to financial corruption, and that we have to tear down the whole system, burn down the banks, take down the government and rebuild it all with crypto.
“I think that’s completely ludicrous. Traditional finance has its problems, we’re all aware of that and no one would argue it. But it’s not going away any time soon – Bitcoin is not going to replace the dollar or the yen or the AUD.”
Where does that leave cryptocurrency? As a complement to the existing order, according to Cerullo.
“I think there’s a world where the two systems can coexist,” he said.
“I think there are a lot of great features which can complement traditional banking and help build a bridge between the two worlds so they’re not necessarily competing but benefiting off each other.
“We’re already starting to see that – we’re seeing these large institutions like Fidelity, Grayscale, JP Morgan – all these top Wall Street guys getting into the market.
“I think they realise it’s not a threat anymore, it’s something they can use to their advantage and for the advantage of their clients.”
Just don’t forget your password…
Crypto’s pivot from currency to investment
Cryptocurrency was invented as a decentralised digital cash system, but in recent years its appeal has for buyers has shifted from use as a currency to investment.
It’s not hard to see why that would be the case – if you take a longer view, the charts for most cryptocurrencies are volatile but the peaks can be unparalleled.
Unlike a stock, cryptocurrency can be used to buy things, but few people would be willing to fork out their Bitcoin for a steak or a coffee. We’ve all heard the story about the bloke who gave up a fortune to buy two pizzas.
Those pizzas would now be worth around $US320 million. But someone had to go first, right?
You can understand why people would be reluctant to part with their crypto, which is why services like Youhodler have come to exist.
Youhodler is a platform which allows people to loan money against their cryptocurrency, receiving the crypto back once they’ve paid off their loan so that they can unlock the value in the currency without having to give it up.
Among the biggest platforms of its kind in Europe, the Cyprus and Swiss-based firm also offers a suite of further crypto features including interest-earning savings accounts and facilities which allow traders to take a long or short position on the price movement of a cryptocurrency.
That may all sound like quite a lot to take in, but Cerullo said more traditional investors shouldn’t be intimidated by the crypto space.
“I know there are a lot of people out there who see Bitcoin in the news and want to get in but the whole thing is a bit overwhelming,” he said.
“I just wanted to put a message out there to say that people shouldn’t worry – I’m no genius by any stretch and I figured it out.”
“Services like Youhodler are making it easier for people to get involved with crypto – there’s no such thing as a stupid question and our team is very helpful.”
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