Jim Duffy: As markets plunge, crypto investors are rightfully smug

As the US stock market hits ­'correction' levels and I watch the value of my self-invested personal pension plummet like a stone, losing months of growth in just a few days, I can now see why the new age investors in crypto currencies feel a little smug.

A 3d rendering of a gold Bitcoin
A 3d rendering of a gold Bitcoin

Yes, the crypto currency geeks now know how it feels to experience a severe dip. They also know that “buying the dip” is not a bad strategy. In short, they are ­maturing and the whole landscape is becoming interesting.

The crypto currency world went on a short bull run at the start of 2017. But, it took a big correction in January that caused many seasoned investors and ­traditional fund managers to write off crypto. Of course they would, they want you to continue to invest in their funds as much as you can, so they can cream off the top and keep up their payments to private schools, PCP payments for Range Rover Vogues and weekly trips to the Gaucho steak house. That’s how the world works, right? But, now that the traditional ­markets have experienced a major ­wobble, having scoffed at the crypto markets, I’d say the score is all even at half time.

Sign up to our daily newsletter

As a new convert to crypto, I’m also ­feeling a bit smug, but of course that may be shortlived as the new world in crypto currency investing is acutely embryonic in its nature and, as I have stated before in this column, anything could happen.

Why? Well, it’s all so new and unproven and with no real, what one might call, fundamentals, to shore up valuations and future potentials and prospects. In fact, the terminology used in the crypto world right now to describe the whole narrative is FUD or Fear, Uncertainty and Doubt.

There is a multitude of misinformation or “fake news” kicking about on social media. Add to this the fear of government regulation with crackdowns on fraudsters and hackers and indeed daylight robbers and one can see why crypto is a scary new world. But, is that not how regulated markets start off? Is it not a bit like the Wild West for a period before some semblance of order takes shape? Perhaps…

There appears to be no logic in how or where to invest. That said, I’ve made some illogical choices in many walks of life. One example in crypto land is the Tronix token. I’ve bought a few of these. Again, I must caveat that this is no recommendation and if any of you want to invest in crypto, then do your own homework or throw your own dart at a board. The founders at Tronix or Tron as it is known, want to reinvent the internet. Yes, that is exactly what I said. Using blockchain technology, they wish to create a fairer internet.

In short, they want to take on the likes of Facebook, Netflix and Amazon, who are raking it in from the web. Tron wants to give power back to people to create content so they can get their creative stuff up on view and cut out the middle man. This is a ­massive undertaking. But, where it differs is it is all about China. And China wants a big win to take power away from Silicon Valley.

Can Tron accomplish this? Well, it has a decent tech team and a rather charismatic, communicative Chinese chief executive in Justin Sun, who is a livewire on Twitter with his 379,000 followers. It has a roadmap in place and some hefty Chinese backers.

But, really that is as far it goes for me in my investment knowledge. Getting the price from $0.05 to $1 as many predict over the next two years is way beyond my understanding. But hundreds of thousands of people believe that Tron can do this. Go figure…

It’s just one of the many examples of “coins” and “tokens” that are being talked up and researched in the crypto world. Will it ­contribute towards my pension in five years? Maybe. But as my traditional portfolio dips and I join in the crypto forums, I figure punting a few bob that I am prepared to lose, is worth the risk. After all, why should the millennials have all the fun?

l Jim Duffy is co-founder of Moonshot ­Academy and author of Create Special.