Monday , July 4 2022

Young Vietnamese look to cryptocurrencies to get rich quick


Cryptocurrencies are becoming a new investment favorite in the country, but many are learning what goes up rapidly could come down at the same speed.

This year Minh Quan of Hanoi started to study the cryptocurrency market for the first time after a friend urged him to invest in it.

The real estate broker started with a $1,000 investment in a startup he barely knew.

“I invested because the founders have good physiognomy,” he says.

The startup picked up and the founders were able to secure funding from foreign funds, and Quan’s investment appreciated five-fold within a month.

Young Vietnamese like Quan are becoming increasingly interested in cryptocurrencies, hoping to get rich quick despite a lack of legal support for them and high risk.

Vietnam is among the top 15 countries in the world by number of cryptocurrency investors, with most being under 35 years old, Lynn Hoang, Vietnam country director for trading platform Binance, said.

Though the government does not recognize Bitcoin and other cryptocurrencies, it still led globally in cryptocurrency adoption with 41 percent of respondents claiming to have bought Bitcoin and others, according to a survey in August by U.S. financial consultancy Finder.

Minh Anh, who is in his 20s, has found that while predicting the market is nearly impossible, a thoughtful and safe investment strategy could help him navigate the cryptocurrency world.

He only invests a small amount in it and only in cryptocurrencies managed by experienced people, he says.

“I only invest 25 percent of my total assets into crypto. After placing an order I turn off the app to not be distracted by the volatility”.

This year he made profits of hundreds of millions of dong (VND100 million = $4,380).

But with great profit potential come great risks.

With bank deposit interest rates sharply down, Hanh, a bank teller, withdrew money from stocks to invest in cryptocurrency futures, which allow investors to predict the market future and bet on it.

However, lacking sufficient knowledge of the market, she lost all her money and decided to stop investing in futures altogether.

Le Trong and his wife invested all their savings into cryptocurrencies in 2017 when the market was booming. They even borrowed to invest.

But then the market fell, hurling them into a crisis as debt collectors began to call constantly. Trong’s wife went into a depression, and it took the couple several years to repay their debts.

“I’ll never get involved with crypto again,” he says.

Lynn Hoang of Binance says the two basic rules for cryptocurrency investment are knowing how to protect your investment and not using leverage.

New investors should opt for cryptos with a large market cap, she says, likening it to buying blue chips in the stock market.

Whether one’s strategy is to invest for the long term or short term, it is important not to be greedy, she warns.

Thuong, an investor in Hanoi, has learned that lesson.

When Bitcoin dropped to around $54,000 on December 4, she poured most of her savings into it, thinking she had found the bottom.

But the fall continued down to $43,000, and, without cash, she has been unable to buy more to average the price.

“Controlling your greed sounds easy, but it is not,” she says.

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