Fakoyejo OlalekanThe Chief Executive Officer of SFS Capital Nigeria Limited, Patrick Ilodianya, has warned that cryptocurrency investors will lose the bulk of their investments in the coming years.
Ilodianya said cryptocurrency is an exciting innovation, but risky because it is unregulated. He said lack of regulation is the bane of crypto investors, he told Punch on Sunday.
Join our WhatsApp ChannelPrime Business Africa analysis showed that in 2022, investors lost -64.6 per cent of their investment value held in various cryptoassets, as the digital currency market struggled with fear among holders whose greed winded down amid rising fraud, hacks, and Elon Musk’s pullout.
This represents a loss of $1.51 trillion in investment value, as the total valuation of the cryptocurrency market fell to $828.77 billion at the end of December 2022, from $2.34 trillion it closed December 2021 with.
According to Ilodianya, more losses are to be expected in the coming years because investment in crypto is currently similar to gambling, and many things can go wrong.
“Cryptocurrency is an exciting innovation supported by blockchain technology. Generally, Nigerians are very adventurous, and some people believe it provides a hedge against devaluation.
“Unfortunately, cryptocurrencies are unregulated. And this is a major problem. Due to the lack of regulation, many people would lose the bulk of their investments in the coming years.
“In my opinion, putting money in cryptocurrency now is not investing; it’s more of gambling. So, many things can go wrong,” Ilodianya said.
Although he forecasted that when regulators find ways to regulate the market, the attractiveness of digital currency investment will grow beyond its current level.
“The crypto exchanges basically act like banks, fund managers and trading exchanges, all in one without any regulatory oversight.
“There will be many problems in the future. I believe enthusiasm would deepen massively. But I also believe when regulation catches up and regulators become actively involved, the abuses would reduce and the attractiveness would increase,” the investment expert said.
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