The Exchange | 'Don't invest in cryptocurrencies' - PwC official warns against practice
Published:Sunday | October 14, 2018 | 12:00 AMNickoy Wilson/Gleaner Writer
With at least 2,000 cryptocurrencies now in existence, Regional Advisory Leader for Pricewaterhouse Coopers Alok Jain has said that investing in them is highly speculative and so is warning individuals against the practice.
Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
"My personal view is I agree with the Bank of Jamaica (BOJ). Bitcoin investing or investing in cryptocurrencies is highly speculative. One should not invest in cryptocurrencies. Don't put any money in there that you aren't prepared to lose," Jain said.
In February, the BOJ released a statement urging individuals to exercise caution in the use of virtual currencies (cryptocurrencies) given the associated risks and the absence of appropriate governance and consumer-protection arrangements.
NO INTRINSIC VALUE
Speaking during the Financial Gleaner/Jamaica News Network business forum 'The Exchange' last Friday at the University of the West Indies Regional Headquarters in St Andrew, Jain also contended that cryptocurrencies have no fundamental value.
"It has no intrinsic value. The only thing that will make the fundamental value of Bitcoin go up or down is widespread usage. If it becomes the default thing that everyone is using, and entire countries start to allow it as legal tender, then you can say, intrinsically, it has more value," Jain said.
However, independent management consultant Peter Wright, who was also at the forum, said that cryptocurrencies do have intrinsic value due to the high level of technology used in their creation. He is also not averse to investing in the digital currencies.
"The amount of technology and infrastructure behind Bitcoin and cryptocurrencies is not the stone that you just talked about. Those machines are not going away. The largest 500 supercomputers in the world are not as powerful as the machines out there running Bitcoin. That is why it's a new asset class. It's the work that goes into it.
"My take on it is that one must research, listen to more programmes, like this, read a lot, and take a bite out of the market. Go in and buy US$500, put it in your vault, and forget about it," Wright said.