Bitcoin, Ethereum… What are the risks of investing in cryptocurrency?

Cryptocurrency is a new kind of investment. Faced with inflation, more and more people are turning to this investment to invest their savings. Franck Fargerelle, wealth advisor and general secretary for Cheval Blanc Patrimoine, gives us some of his advice to better understand this “very large and very complex universe”.

First, the expert reminds that cryptocurrency does not concern only one currency. There are over 18,000 cryptocurrencies in circulation, and within these there are different types. “There are deflationary or inflationary cryptos: it depends on the quantity put on the market and available at a given deadline”, explains Franck Fargerelle.

According to him, bitcoin, for example, is an inflationary currency because “at some point there will be a stop in creation, and therefore, the increase in the value of the currency”.

The wealth advisor recalls another important counterpart to cryptocurrencies: “Some cryptos have no end: the more there are created, the less value it will have. It’s so broad and complex to say to yourself: ‘ Am I going to prevent myself from inflation, by investing in cryptos?’ The answer is no”, notes Franck Fargerelle.

“For me, the essence of the stock market or investments is to participate in the creation of wealth. But when I buy crypto, I buy speculation, I just buy the capacity of cryptos to increase in value”, articulates the general secretary of Cheval Blanc Patrimoine.

The latter also points out that the cryptocurrency does not offer any visibility in terms of ethics. “My personal sensitivity is to say that it does not depend on any state, on any regulatory authority, we arrive in the metaverse of finance, we arrive in a parallel universe… on which we have no taken”, concludes the specialist, adding that he would not advise his clients to invest in cryptocurrency.