AMP Capital’s Head of Investment Strategy and Economics, and Chief Economist, Dr Shane Oliver shares his views on cryptocurrency in the latest episode of AMP’s Simplifying Investing* podcast.
Dr Oliver, one of Australia’s most experienced and respected economic voices, discusses a range of topics relating to cryptocurrency, including the role of government, regulatory challenges and its attributes as an investment.
Dr Oliver sees potential for cryptocurrency to become more mainstream but cautions that it remains a volatile investment choice.
Excerpts from Dr Oliver’s conversation with Simplifying Investing host Adam Marsters include:
- “It’s hard to get a read on the true value of cryptocurrency generally. You can value property, shares or infrastructure assets because they generate a flow of income and earnings over time and then compare against other assets. With cryptocurrency it’s next to impossible to value – it’s really a function of how much one thinks they’ll be able to sell it for. That obviously makes it highly speculative.”
- “There’s no doubt that cryptocurrency has the potential to revolutionise things, there’s just a lot of uncertainty as to which way it will go.”
- “The current environment reminds me of the days before central banks, when banks could create their own currency, which also created instability as currencies moved all over the place through booms and busts – ultimately that was rationalised by the formation of central banks.”
- “Since 2010 (Bitcoin) has had several occasions where it’s fallen by over 75 per cent in value. This volatility is why governments might want to regulate it as it becomes more widely dispersed.”
- “Given its speculative nature I would be a little bit cautious when investing (in cryptocurrencies), but if so, have it as a very small portion of an overall investment portfolio.”
The podcast series aims to de-mystify the often-complex world of investing, drawing on the knowledge of AMP’s experts to answer the big questions in superannuation, retirement, home loans and beyond.
* The podcast is general in nature and hasn’t taken your circumstances into account. Remember the value of investments may go up or down and you may not get back the amount you invested. It’s important you consider your personal circumstances and consider speaking to a financial adviser before deciding what’s right for you. The opinions and views featured in this podcast reflect the individual’s own. Date of publication 12 November 2021. AWM Services Pty Ltd (ABN 15 139 353 496).