Cryptocurrency experts say volatility is an opportunity to invest in the asset

The rise of cryptocurrency will continue even as a fall in value for Bitcoin damages its reputation, but investors should not be worried about market volatility, said experts.

“The entire cryptocurrency market cap is less than $100 billion… it is very small and that’s why it is volatile at times,” said Andrea Bonaceto, chief executive of Eterna Capital – a fund management company in London.

“In 2011, it was assumed that Bitcoin is dead because it dropped from $32 to $2, but it came back strongly. These downfalls are embedded into any early-stage industry,” he said.

A year ago, the value of a single Bitcoin reached almost $20,000 (Dh73,60). Now, one coin is worth about $3,000. Even the current depressed value is far above the $1,000 it commanded at the start of 2017.

Some industry experts said now is the best time to invest in Bitcoin.

“From the investor point of view, this is the best time in cryptocurrency history. Obviously, no investor would like to invest when Bitcoin was hovering around $20,000,” said Mr Bonaceto, one of the speakers at the Global Blockchain Congress in Dubai yesterday. Market analysts said security is a fundamental concern with cryptocurrency.

More than $1.1 billion was lost to thefts in the first six months of 2018, according to cyber-security company Carbon Black based in Massachusetts.

“Security is a huge problem … too many people are jumping into the grid, rushing to make quick money without doing basic homework – protecting the data,” said David Schoenberger, chief innovation officer of a digital security company Krypti.

All regions are equally vulnerable to cryptocurrency thefts, he said.

“It is very important to convert data into encrypted applications to ensure even if it is stolen, it is of no discernible value to hackers,” said Mr Schoenberger, whose clients include US military and autonomous vehicle companies.

The global market for cryptocurrency was valued at $574.3m in 2017, according to Transparency Market Research.

The New York consultancy forecasts the market will be worth $6bn by 2025.

“The whole cryptocurrency market is going through a dip right now. But we are seeing a gradual comeback. This industry will grow stronger and is here to stay for longer,” said Hans Fraikin, chief executive of Libra Project in Abu Dhabi.