Cryptocurrency Investment

In their early years, cryptocurrency instruments were driven by a combination of tech innovation, the global financial crisis and disillusionment in fiat currencies during periods of quantitative easing or national turmoil. This caused a situation by which enough investors were looking for a new currency-styled investment instrument that the values of Bitcoin, Ethereum and many other currencies experienced a period of steep growth. As with any rampant growth period, this triggered snowballing attention and participation, which led to the formation of a bubble, which inevitably needed to burst.

Despite the fact that some of the gloss has been removed from the crypto scene since the market adjusted and entered a lengthy period of volatility, the concept of currencies that are easy to trade across borders and in any amount remains attractive. There are obstacles to overcome, not the least of which is the gargantuan amount of carbon-heavy computing resources utilised to create and maintain coins and networks such as the Blockchain, distributed asset registers and separation from national fiat systems hold their appeal to many. As such, those interested in the technology underpinning these technologies may find it valuable to continue investing in their development.

For the average mum-and-dad investor, it's hard to suggest that cryptocurrencies are anything other than a gamble. As long-term stores of value, they have yet to make their case, and prices are still determined simply by supply and demand, rather than underlying productivity, so values are likely to remain volatile until such time as the coins start to be regarded as viable competitors to smaller national currencies.