If you’ve walked up to a TV lately, chances are you’ve seen a cryptocurrency advertisement.
There was the Super Bowl ad with a QR code dancing around the screen, guiding people to the Coinbase app. There’s the one with Matt Damon, with the epic slogan “Fortune smiles on the brave”, which only at the end is revealed as a Crypto.com ad. And of course, there’s the one with Tom Brady and Gisele Bündchen, announcing the FTX cryptocurrency exchange.
Cryptocurrency has been around long enough to transcend fad status. But it entered the mainstream in a new way, and I wanted to chat with experts in Boston about whether it was overrated and what newcomers need to know before they start getting into cryptocurrency.
First, I spoke with Dave Balter, the managing director 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 commercials, tools for the industry are still being built, websites are still crashing, and cryptocurrency use cases are still evolving. (Boston’s biggest crypto startup, Circle, just changed its plans to raise more money and go public.)
“We’re still probably in round three of all of this,” Balter said. “[But] I think a lot of people have realized that this thing isn’t going away, and it’s probably changed their minds. But I think it’s still very, very early.
Balter agreed that there is some hype for crypto right now, comparing it to the buzz of the dot-com days in the late 1990s. But he pushed back against the idea that it is just that, noting that the fundamental technologies that underpin cryptocurrency — like some of the tokens people can buy and the digital ledgers they operate on — are solid and here to stay.
“It’s not wrong,” he said. “It’s a real transformation of your financial transactions.”
Next, I chatted with Semyon Dukach, a former MIT blackjack player and managing partner of One Way Ventures. He’s invested in cryptocurrency companies before and struck a similar tone: There’s certainly hype in crypto, he said, but it also broke new ground in the financial space in a way that no one can ignore.
For newcomers, Dukach and Balter suggest the same: start small and buy a tiny bit 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 cryptocurrencies to get started. (Currently, one Bitcoin is worth around $42,000.)
For those looking to invest in coins other than Bitcoin, he urges caution and offers some advice.
When selecting a new cryptocurrency to buy, consider the background of its creators and analyze their skills and qualifications. If you know computer programming, examine the code behind a cryptocurrency to help you gauge its soundness.
It is also important to follow what crypto enthusiasts are saying about a potential token. To do this, browse places like Twitter and Discord, which are popular gathering places for crypto experts, Dukach and Balter said.
But above all, beware of investing in a cryptocurrency just because it’s trending on Reddit or a celebrity is touting its qualities.
“By the time Elon Musk writes about a piece on his Twitter, it’s probably too late for you to buy it,” Dukach said. “I can’t imagine you would make money just by seeing the obvious things.”