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MANILA – Crypto’s rise is dizzying.

At the end of 2010, Bitcoin was worth only $0.30 or around P16.82 in today’s exchange rate. As of Feb. 20 this year, Bitcoin is worth $51,717.50 or around P2,899,438.20 as investors hoped that the United States would approve more trading of the asset.

If you had invested $100 or P5,606 in Bitcoin at the end of 2010, it would be worth $17,237,849 today or P966,405,552--making you almost a billionaire in peso terms.

But crypto’s fall could also be as dramatic. From a high of $68,789.63 in 2021 it sank to a low of $15,599.05 in 2022, which means if you invested at the height of its rise, your investment fell by around 78 percent.

But is it a good time for Filipinos to invest in cryptocurrency, given its volatility and its past use in scams and Ponzi schemes?

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What is cryptocurrency?

Cryptocurrency is a form of digital currency. Unlike money in your e-wallet or digital bank accounts, cryptocurrency has no physical equivalent. “Crypto” means it uses encryption to verify transactions, according to the website of cybersecurity firm Kaspersky.

Cryptocurrency transactions don’t rely on banks, which means there is no need for one to present identification documents, like IDs or birth certificates, before trading.

Despite the lack of a know-your-customer protocol, there is transparency in the crypto trading process, according to Decentralized Finance (DeFi) Philippines founder Paolo Dioquino.

“Why is it transparent and all? It's all built under blockchain. And blockchain is a type of technology–it's a distributed ledger technology where anyone can have access on the ledger,” he said.

“So anything, transaction-wise, that's happening can be viewed by anyone,” he explained.

Miguel Cuneta, who founded SCI Ventures Inc. and its subsidiary Rebittance Inc said investing in Bitcoin is like investing in digital gold. But he also cautioned that people should be careful as it might not be the right investment for them.

 Where to invest in cryptocurrency in the Philippines

Once you’re ready to buy crypto, make sure you buy from one of these virtual asset service providers (VASP) authorized by the Bangko Sentral ng Pilipinas (BSP):

 Philippine Digital Asset Exchange (PDAX) 

PDAX describes itself as the country’s leading homegrown cryptocurrency exchange. Supervised by the Bangko Sentral ng Pilipinas, it is available both as a web-based and a mobile app.

Coins.ph

Starting out as a digital wallet, Coins.ph now lets its users to trade cryptocurrency.

GCash

Yes, you can invest in crypto using the country’s most widely-used e-wallet app, but first need to get verified.

Maya

Maya allows its users to buy crypto for as low as P1. Before trading crypto on the app, users must upload one valid ID.

Union Bank

Union Bank said it is the first and only universal bank in the Philippines that allows users to trade cryptocurrencies on its mobile app.

JuanExchange

JuanCash says its trading platform is one of the pioneer virtual asset exchange providers in the Philippines.

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What cryptocurrencies Pinoys can invest in?

There are many different kinds of cryptocurrencies Filipinos can choose from. Some of these are:

Bitcoin - Bitcoin is the world’s first cryptocurrency, established in 2009. It is the world’s largest and most traded cryptocurrency.

Ethereum - Ethereum was developed in 2015. On its website, Ethereum describes itself as a platform where users can get borrowing, lending, or savings products by simply having an internet connection. Ethereum is second to Bitcoin when it comes to market capitalization.

Litecoin - Litecoin prides itself on having faster transaction confirmation times and improved storage efficiency compared to other forms of cryptocurrency. 

Ripple - Ripple said its users can make real-time global payments without tying up capital in destination markets.

Tether - Tether is a form of cryptocurrency called a stablecoin, because all of its tokens are backed 1-to-1 with a government-issued currency.

Solana - Solana is the third largest chain in the world behind Bitcoin and Ethereum. On its website, Solana claims that it can handle more than 3,000 transactions per second with its block times of 400 milliseconds.

So why invest in crypto?

For Arlone Abello, the crypto market analyst and financial advisor, cryptocurrency is a way for one to diversify his or her assets.

“Especially if you want to participate [in] global financial events such as Bitcoin being now absorbed or as an ETF, then this is a way to participate [in] global movements or bigger events,” he said.

Crypto is a good investment for the risk-takers, he said.

“Kasi stock market regulated. May ceiling, may flooring play, may ceiling play, di ka pwedeng gumalaw above that within the day. Stock market, meron ding trading hours, may holiday. Kung ikaw ay risk taker, you can trade anytime 24-7,” he explained.

Dioquino also noted that it may be easier for the younger generation to invest in crypto.

“Kasi the new generation is more savvy for the digital space, right? They understand or they grew with their cell phones, mobile phones, and actually learning about the future technologies.”

People who have traditional investments can also put their money in crypto but they must understand the asset before jumping in, he said.

“The learning curve to actually understand crypto is very steep. Mahirap talagang pag-aralan ang crypto if it's your first time,” he said.

For Abello, Filipinos should not invest in cryptocurrency if it’s being presented to them as a get-rich-quick scheme.

“You should not invest if it's being presented to them as a lifesaver. No. It's not. It's going to be an alternative potential solution for a potential appreciation of your net worth.”

“Pwede ka pa ring bumaba. But at the end of the day, long term, 10 years, the appreciation, ang lakas talaga ng coin,” he said.

“Ang cryptocurrency is not for one day, one week, it's for long-term perspectives. Because volatility can kill your investments,” he added.

Dioquino agrees with Abello’s view that crypto is a long-term play.

“If you invest in real estate, your return, your potential ROI will still be seen in 5-10 years. But for cryptocurrency, you can actually see some returns happening in a short span of time. Like 6 months, 4 months. And actually at a very high multiplier because it is a very small market,” he said.

“But it's very risky. Kasi when an asset is very volatile, it could jump very fast and it could drop very fast as well. And if you don't have the investment savviness, you don't understand how investment works, then you are more likely to lose than to win.”

Abello also noted that those struggling financially must not invest in cryptocurrency.

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“Kapag ipagte-trade mo young pang-ulam niyo tomorrow, yang pang-dinner niyo tomorrow, eh mali yun,” he said.

“If you're going to trade your money that you're going to [use to] pay your bills, your debt, pang-ulam mamaya, pangbaon ni Jun-jun sa school–if you're going to trade those types of money, then get out of crypto. Get out. Because trading crypto is for money that you're willing to burn. It's for money that you're willing to just forget.”

“Hindi ito para sa mga taong kumikita ng minimum wage,” he added.

As to how much one should invest in crypto, Abello said this depends on one’s risk appetite.

Like other financial planners, he also stressed the importance of diversifying one’s investments.

For Baloran, a wealthy, risk-taking investor with P10 million in liquid funds can invest 40 percent of that in crypto. The next 30 percent can be invested in equities, bonds, and REITS, while the last 30 percent can remain in cash, he added.

 ‘Hold on’

Dioquino, an electrical engineer by profession, was working on a hydropower plant in 2017 when he learned about cryptocurrency.

“I actually just started with P200 eh,” he told ABS-CBN News. He said he allotted a portion of his salary to buying Bitcoin and Ethereum monthly.

But Dioquino said he saw his assets fall a year after.

“I [saw] my portfolio going down negative 80 percent,” he said. But I realized that if this is something that would innovate the space, then you might just hold it for a long time. So I held it in, this cost average throughout the years. And so far, I'm doing, I would say I'm doing pretty well.”

He now works with Pendle Finance, a decentralized finance platform.

Cuneta claimed that 92 percent of people who’ve ever bought Bitcoin are in profit right now.

“When Maya came out and offered Bitcoin, crypto, I bought about P2,000 worth of Bitcoin on the app and left it there last year, May last year. And right now, it's worth P 3,000,” Cuneta said.

Dioquino offers this advice to anyone who would want to go into cryptocurrency: learn about its uses.

“Why are people investing in Bitcoin? And if you align with what they think of why they're investing in Bitcoin, then go ahead and invest. Kasi it's the same thought process as investing in real estate or land or businesses naman eh,” he said.

“If you're aligned with the vision of that business, or if you're aligned with that vision of investing in that property, then you would go ahead with it. I'd say do the same mindset for Bitcoin,” Dioquino added.