Cryptocurrencies are generating a lot of interest from investors – helped in part by a near 2000 percent in the value of market leader – Bitcoin, but AMP Capital’s Shane Oliver is sitting on the fence.
“No matter how many times its explained to me how it works I still struggle to completely understand it,” says Oliver, AMP Capital Head of Investment Strategy and Chief Economist. “One thing I always say to investors is if you don’t understand what you are investing in, stay away.”
The remarkable rise of Bitcoin also adds to his position of caution.
“It might sound very exciting but when something goes up by that much over such a short period, I usually get cautious because sooner or later it will come back down the other side,” Oliver says.
Cryptocurrencies such as Bitcoin, are digital currencies that are designed to be secure and often anonymous. The rise in their popularity and number of new entrants in this space has triggered regulators to act, to restrict them, most recently in China.
“My view is that you have to go in with your eyes open,” says Oliver. “I would be a bit sceptical as I would be with gold, but at least with gold I can touch it, I can see it, I know where it is and what it is. Whereas with this, it’s out there in cyberspace.”
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