Plus Minus Cryptocurrency Investments

Cryptocurrency, aka cryptocurrency, is starting to become a prima donna investment instrument in the country. This is because its value has continued to surge in recent months, surpassing other instruments such as gold to stocks.

One of the most popular is Bitcoin which is capitalized up to US $ 1 trillion. Unmitigated, giant companies like Tesla to Visa are also collecting it as an asset.

Apart from Bitcoin, the value of other crypto currencies such as Ethereum, Binance Coin to Dogecoin also increased. Not long ago, the cryptocurrency market capitalization even surged through US $ 2 trillion, which is the highest level in history

Market tracking data for CoinGecko and Blockfolio revealed that the increase in cryptocurrency market capitalization was due to increased demand from institutional and retail investors.

With the entry of crypto currencies in these investors' portfolios, of course the portion to other assets will decrease if there is no additional capital. One of the most obvious is the gold market which Bitcoin continues to undermine.

Understandably, Bitcoin is predicted as digital gold which is considered safer for investors to avoid inflation. However, the rapid transfer of capital is also inseparable from a number of advantages that cryptocurrencies have compared to other investment instruments.

Central Capital Futures analyst Wahyu Laksono said one of the advantages is that the transaction costs are cheap, practical and fast because they are digital-based.

By taking advantage of technological advances, many parties can benefit from Bitcoin et al. This includes people who have not been embraced by banks (unbankable).

"One aspect of crypto that interests me is that this technology has the potential to attract unbanked people from all over the world into the modern financial system," he told CNNIndonesia.com.

In addition, cryptocurrencies also have their own flexibility because they don't have access to or are affiliated with a bank. This benefits the owner because they can make transactions with crypto money at any time, no need to wait for bank working hours.

As is known, even though it is virtual, crypto money can still be used for online transactions and can be converted to currencies such as rupiah, dollars and others so that it can be an alternative for cross-border transactions.

"Technology is free and impartial, so it has a big room for many people to use it directly," said Wahyu.

In addition, cryptocurrencies also promise clear advantages because they are not related to institutions, institutions, or countries.

"Therefore, investors see opportunities for capital flight from fiat money to other assets, namely digital money," he explained.

However, cryptocurrencies also carry a number of risks just like any other investment instrument. Division Manager of PT Royal Trust Futures, Suluh Adil Wicaksono, said that the biggest one is the high fluctuation in value so that the price can go up sharply and then fall in less than a day.

"You can get big profits in a fast time, but you can also experience losses quickly too," he said.

Moreover, there are no rules for suspension or temporary suspension of trading in cryptocurrency investments like in the stock market, in case of a sharp increase or decrease.

"The stock still has an unusual market activity (UMA), so if there is an unearthly move, it goes down or rises sharply, there is an authority that stops trading. There are clear rules, not in Bitcoin," he explained.

Another drawback is the absence of legality from the central bank. Please note, until now, a number of countries have not legalized Bitcoin as a legal means of payment, including in Indonesia.

Bank Indonesia also emphasized that crypto currencies such as bitcoin et al are not recognized as legal means of payment. Thus, the government or related authorities cannot interfere with the ups and downs in the value of these assets.

"There is no person in charge regarding the price which is very fluctuating. Therefore, the fluctuation of the price really depends on supply and demand," he said.

He added that crypto currencies are also not under the supervision of the central bank like other fiat currencies. Therefore, there are no standard rules for trading Bitcoin et al.

The last drawback is the problem of safety. It is undeniable that the technology offered by digital currency has two sides to the coin. In addition to offering convenience for users in transactions, it is feared that this technology is also vulnerable to hackers or hackers.

In case of hackers' actions, users cannot report to the relevant authorities because digital currencies are not under the supervision of the central bank.

Indonesia's Center of Reform on Economics (CORE) economist Piter Abdullah Redjalam said that the popularity of cryptocurrencies cannot be separated from the large support from many global players.

"With limited supply due to decentralized money creation, through mining, supported by the growing support of global public trust, the value of crypto money continues to soar," he said.

The very high increase in crypto money certainly attracts the interest of fund owners. This snowball process will continue unless there is a shock that destroys confidence in cryptocurrencies.

That is why, although from the beginning it responded to the existence of crypto money by prohibiting its use as a means of payment, BI could not or had not prohibited the public from buying or investing in crypto money.

"Until now, the central bank is still reviewing the right steps to respond to the development of crypto money. This includes planning to issue central bank digital money. But I believe the issuance of central bank digital money is not the right response," said Piter.

According to Piter, crypto money could trigger a paradigm shift and the position of the central bank in the future. However, for now, it is used more as an investment asset.

Therefore, according to him, what is needed now is to create regulations that provide security and comfort for investors and industrial fairs. You do this by facilitating cryptocurrency trading with a more liquid market and transparant

"Crypto money investment is done through a company that has a license. So there are regulations. Crypto money investment is not done carelessly," he said.

Meanwhile, Head of the Commodity Futures Trading Supervisory Agency (Bappebti), Sidharta Utama, previously said that the rapid development of crypto money requires the establishment of regulatory tools and the institutions that support it.

It is planned that CoFTRA will immediately approve the establishment of a special crypto asset exchange to facilitate crypto currency trading which is increasingly popular in Indonesia.

"This exchange focuses on protecting business actors so that relations between all parties can run well. Between traders, investors and with other institutions can be clear and safe," he said.