People should only invest in cryptocurrencies what they can afford to lose, says entrepreneur and tech investor Scott Fletcher.
The founder of Manchester-based ANS was one of 10 speakers to address an audience of 150 at BusinessCloud’s sold-out cryptocurrency and blockchain breakfast event earlier this month.
Earlier this month the value of Bitcoin plummeted to below $6,000 – compared to its peak of $19,000 in November 2017.
Such volatility has meant people have made or lost a lot of money in the blink of an eye, leaving many to question the digital currency’s long-term future.
“Don’t put money in that you can’t afford to lose,” Fletcher said. “Treat it as going to Vegas.”
Despite the volatility, Fletcher believes that deciding not to invest could be just as harmful as investing too much.
“If you’re investing more than one or two percent of your wealth, then you’re crazy,” he said. “But if you’re not, you’re crazy too. You will have missed out on probably the biggest change in wealth movement that the planet’s ever seen.”
Although Fletcher has recouped his original investments, he argues that a potential fortune shouldn’t be the only motivation for getting into the cryptocurrency space.
“It’s not just about making money,” he said. “It’s about backing projects you believe in. The whole ecosystem and ethos of crypto and blockchain is about transforming the way our online life operates – removing some of these barriers, battling against the system.”
For Sara Simeone, head of digital at Democracy PR, it’s all about calculated risk.
Her initial investment in Ethereum was not based on the exciting potential for profit, but because her intensive research had led her to believe in the world-changing technology that cryptocurrency is built upon: blockchain.
“I didn’t come into this space to become rich, I came to this space to understand the technology behind it,” she said.
“I really believed in the technology behind the currency, more than the actual coin itself. I like calculated risk so I did my research.”
Self-taught cryptocurrency expert and enthusiast Ben Semchee, who travelled to Manchester from Missouri to speak at the event, believes that digital currencies have the potential to change the world.
The former stand-up comedian and radio DJ’s advice to cryptocurrency novices is to treat the sector like a dark and unfamiliar room.
“Do it slowly and educate yourself,” he said. “You should look at it like this: you’re walking into a room that is completely pitch black, you’ve never been there, you don’t know anything.
“Walk slowly. If you hit your toe, you hit your toe, you don’t trip and fall and break your arm.
“Educate yourself and walk slowly with a big smile on your face because on the other side of that room is the future – and the future is bright.”
Phillip Nunn, CEO of multi-asset investment company The Blackmore Group, told the audience to be wary of sensationalist headlines.
“Whenever a headline has been published in the free press I ignore it,” he said. “If it says it’s going down it’s a sign it’s usually getting better. If you’re becoming a cryptocurrency trader you need to dive deeper and remove the US dollar from your head.
“Look at the underlying holdings in Bitcoin, because this thing is going to go really big. Dollars are dead. We could be looking at the next Jeff Bezos working with ICOs instead of VCs.”