If you’ve been anywhere near a television recently, chances are you’ve seen a cryptocurrency ad.
There was the Super Bowl commercial with a QR code dancing around the screen, leading people to Coinbase’s app. There’s the one with Matt Damon, with the epic tagline “Fortune favours the brave,” which, only at the end, reveals itself as a Crypto.com ad. And of course, there’s the one with Tom Brady and Gisele Bündchen, advertising the FTX cryptocurrency exchange.
Cryptocurrency has been around long enough to transcend fad status. But it’s entered the mainstream in a new way, and I wanted to talk with experts around Boston about whether it’s overhyped, and what newcomers need to know before they start dabbling in cryptocurrency.
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First up, I talked with Dave Balter, the chief executive of Flipside Crypto, a Boston-based blockchain intelligence firm. Balter, who has been investing in cryptocurrency since 2015, said it’s still early days.
Despite all the TV ads, tools for the industry are still being built, websites are still crashing, and the use cases for cryptocurrency are still evolving. (Boston’s biggest crypto startup, Circle, recently changed up its plans to raise more money and go public.)
“We’re still probably in the third inning of this whole thing,” Balter said. “[But] I think a lot of people have woken up to the fact this thing isn’t going away, and that’s probably changed some minds. But I think it’s still really, really early.”
Balter agreed there is some hype to crypto right now, comparing it to the buzz of the dot-com days in the late 1990s. But he pushed back at the notion that it’s only that, noting the fundamental technologies undergirding cryptocurrency — like some of the tokens people can buy and the digital ledgers they operate on — are strong, and here to stay.
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“It’s not fake,” he said. “It’s actual transformation of your financial transactions.”
Next up, I chatted with Semyon Dukach, a former MIT blackjack player and managing partner of One Way Ventures. He has invested in cryptocurrency companies before, and struck a similar tone: There certainly is hype in crypto, he said, but it’s also innovated the financial space in a way no one can ignore.
For newcomers, both Dukach and Balter suggest the same thing: Start small, and purchase a tiny portion of Bitcoin, a popular cryptocurrency, to learn the fundamentals of crypto investing. Dukach added that it’s worth using a well-known service like Coinbase or FTX to buy, sell, and trade cryptocurrency to start. (Currently, one Bitcoin is worth around $38,000.)
For those wanting to invest in other coins aside from Bitcoin, he urges caution and suggests a few tips.
When vetting a new cryptocurrency to buy, look at the backgrounds of its creators, and analyze their skills and qualifications. If you know computer programming, examine the code behind a cryptocurrency to help assess how sound it is.
It’s also important to track what crypto enthusiasts are saying about a potential token. To do so, scour places like Twitter and Discord, which are popular gathering places for crypto experts, Dukach and Balter said.
But most of all, be leery of investing in a cryptocurrency simply because it’s trending on Reddit or a celebrity is touting its qualities.
“By the time Elon Musk writes about a coin on his Twitter, it’s probably too late for you to be buying it,” Dukach said. “I can’t imagine you’d make money just seeing the obvious stuff.”
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