Crypto volatility offers best investment opportunities, experts say

The rise of cryptocurrency will continue even as Bitcoin's tumble damages its reputation, and investors should not be worried about the current market volatility, say experts.

"The entire cryptocurrency market cap is less than $100 billion … it is very small and that's why it is volatile at times," Andrea Bonaceto, chief executive of Eterna Capital – a London-based fund management firm, told The National.

“In 2011, it was assumed that Bitcoin is dead because it dropped from $32 to $2, but it came back strongly. These downfalls are embedded into any early-stage industry,” said Mr Bonaceto.

A year ago, the value of a single Bitcoin reached almost $20,000. Now, one Bitcoin is worth roughly $3,000 – a massive drop from its 2017 high. However, even that vastly reduced value is still far above the $1,000 it commanded at the start of 2017.

Industry experts feel now is the best time to invest in Bitcoin.

“From the investor point of view, this is the best time in cryptocurrency history. Obviously, no investor would like to invest when Bitcoin was hovering around $20,000,” said Mr Bonaceto, who was one of the speakers at Global Blockchain Congress in Dubai on Wednesday.

Market analysts say security is a fundamental concern with cryptocurrency. More than $1.1 billion was lost to thefts in the first six months of 2018, according to Massachusetts-based cyber security company Carbon Black.

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"Security is a huge problem … too many people are jumping into the grid, rushing to make quick money without doing basic homework - protecting the data," David Schoenberger, chief innovation officer of a digital security company Krypti, told The National.

All regions are equally vulnerable to cryptocurrency thefts, he said.

“It is very important to convert data into encrypted applications to ensure even if it is stolen, it is of no discernible value to hackers,” stated Mr Schoenberger, whose clients include US military and autonomous vehicle companies.

The global market for cryptocurrency was valued at $574.3m in 2017, according to Transparency Market Research, a New York-based consultancy company, which forecasts the market will be worth $6702.1b by 2025 - growing at a compound annual growth rate of 31.3 per cent between 2017 and 2025.

"The whole cryptocurrency market is going through a dip right now. But we are seeing a gradual comeback. This industry will grow stronger and is here to stay for longer," Hans Fraikin, chief executive of Abu Dhabi-based Libra Project, which is issuing equity tokens in green utility infrastructure, told The National.