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BetaShares CEO on dangers of Bitcoin (BTC) and other cryptocurrencies

Sat 06 Nov 2021 ▪ 18h06 ▪ 3 min read — by Hugh Renolds

Recently, Australia has seen the launch of its first exchange-traded funds (ETFs) targeting cryptocurrencies. Naturally, both ETFs have succeeded as digital assets are very popular with Australians. What’s more, one of these funds, listed on the Australian Stock Exchange (ASX) under the ticker “CRYP”, managed to raise more than $42 million (~£31 million) in a single day, making it the most successful launch in the history of the exchange.

Alex Vynokur shared his opinion on cryptocurrencies

In light of this occasion, BetaShares CEO Alex Vynokur has spoken up, warning investors about the importance of being extra-careful when investing in crypto-related products.

He also said that recently, the demand for such products has grown remarkably, although many investors still don’t realise all the risks associated with digital assets. Therefore, Vynokur emphasised, the importance of diversifying your portfolio because even in case of unsuccessful investments in cryptocurrencies or any other assets, the owner of a diverse portfolio will be able to weather their failure with relative ease.

It is worth noting that, unlike other crypto-focused ETFs, the first BetaShares ETF is focused not so much on the digital assets themselves as on the companies associated with them.

The head of Cosmos supports the words of Vynokur

In his views, Alex Vynokur was joined by Dan Annan, CEO of Cosmos, who also urged investors to approach this asset class with the utmost caution. According to him, cryptocurrencies are one of the riskiest types of investments due to their extreme volatility, even though they can give crypto investors some of the highest yields.

Annan also noted that in addition to the risks associated with the crypto assets per se, investors may face the problem of insufficient security of investments in cryptocurrency ETFs, since many of them are not focused directly on the asset itself.

And finally, the head of Cosmos stated that in the cryptocurrency market, you should pay extra attention to the nature of the companies whose assets you’re looking to buy:

“And I think there are a few products out there at the moment that mask as digital miners, but when you lift the hood, they’re holding companies like Tesla and PayPal. It’s extremely important that [moving forward] investors lift the hood of the exposures they’re looking to own.”

It goes without saying that if more ETFs are approved, the popularity of cryptocurrencies in Australia will increase significantly. Many investors in the country already give their preference to digital assets. And of course, raising investor awareness of the risks associated with cryptocurrencies will become one of the main tasks of many businesses, as evidenced by recent reports from Dan Annan and Alex Vynokur.

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Hugh Renolds avatar
Hugh Renolds

I believe in the bright future of crypto. I have been investing since 2017 and look to share my experience in, and thoughts on, crypto and the blockchain.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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