"Bitcoin is cool and has lots of utility" but the plethora of altcoins springing up and ebbing away are a dazzling, confusing, crazy buffet of pure trading risk".
These are the views of Clem Chambers, author of Trading Cryptocurrencies: A Beginner’s Guide, and chief executive of the global stock and shares information website ADVFN.
With a background in financial journalism, Mr Chambers keeps his style simple, straightforward and in as plain English as it is possible to be when a new lexicon develops around a whole new investment class.
A Beginner’s Guide explains the growth, development and terminology of cryptocurrency, and the support services being created around this investment phenomenon.
The book is aimed at people who want to get into the virtual currency game, but are unsure how to start, where to start, and how much to start with. Mr Chambers doesn’t pull any punches. It’s not just that investing in cryptocurrencies is risky – at one point, he says: “As long as you are careful, you will be okay, but you need to keep your level of level of paranoia high.”
But Mr Chambers thinks the risks of cryptocurrency being a hoop that will end soon and be blown away by regulation are minimal. He believes the creation of virtual currencies is a “tap of wealth that can flow a new kind of wealth into economies”, and a here-to-stay asset class, but “you cannot bank on being lucky”.
So Mr Chambers provides rules and signposts to help the novice investor take a step away from the “Wild West” towards a sensibly diversified cryptocurrency portfolio. Useful tips include: anchor yourself in the golden rules of investing (don’t get carried away), keep the “entry and exit point for your funds simple and user-friendly”, and “have a spread of risks” (diversifying).
He’s scathing about the sharks and charlatans who aim to get some skin in the game, but just because of a few rogue players, the author does not actually condemn cryptocurrencies. Nor does Mr Chambers condone putting all of your money into the asset class. He’s clear on the risks, rewards, the reasons why you might invest, and the rapid way in which the cryptocurrency reacts to any event.
But while he is clear on the risks, he does make it sound fun. After all, cryptocurrencies is a game, a casino where you can get “some coins to play with”. And games are fun, right? Until you lose your money that is. However, that’s the point of a game – you win some, you lose some. Perhaps you learn the rules as you go along, and work out more ways to win than to lose.