Economist Brad Olsen says the possibility of making money fast is enticing, but the variety of coins can make it hard to predict what will take off.
“Everyone remembers the good cryptos that went well.
"If you were smart enough to buy a Bitcoin when it was worth a couple of dollars, you'd be pretty rich right now.
“However, for every one cryptocurrency, coin, token, that went well, you've got I don't know, 10 to a hundred sort of went very poorly and fell over.”
He says the variety of coins adds to the difficulty of deciding what to invest in.
“You've got all sorts of meme coins, fart coins.
"I mean, you had the ‘hawk tuah girl’ who did one, and it immediately fell over.
"Those sort of options means that if you are investing in a new cryptocurrency and expect it to be the next big thing, you've got a pretty slim chance of it definitely becoming sort of mainstream.”
However, he says crypto is no longer a small currency, and banks are investigating a middle ground between fiat (NZD, AUD, EUR etc) and crypto for everyday circulation.
“You are seeing increasing focus from central banks around the world, including the Reserve Bank to consider what a central bank digital currency could look like.
"So, a little bit more in the middle of all of the options that we've been talking about.
"There are abilities for Governments and central banks to think about how they change the money system slightly to make things more accessible over time without completely pulling the rug out from under everyone.”
Olsen advises thorough research before investing.
"I think when it comes to crypto, there's a lot of people that will talk very strongly about their views and how good it is or how bad it might be, depending on who you talk to.
"I would try and get a pretty balanced view.
"There are some good resources from sort of neutral parties out there that give you a bit more of a fact."
“Yes, there's might be an opportunity to make some money but it's a pretty good opportunity to lose it all as well.
"So, keep your wits about you, do your homework, and figure out where your risk tolerance is.”
Dobson-Sinclair shares the sentiment, saying research is vital.
“There’s lots of resources available, it’s more which one do you pick.
"There are lots of scams out there, it's prevalent within the industry unfortunately but there are many good resources such as the Crypto Currency NZ website and meet ups that happen all round the country each month.
"As well as lots of good research projects on YouTube, papers – just trying to understand the fundamentals which is a really good starting point to get into the industry.”
