Why cryptocurrency has become so popular this year? What factors and events contributed to this? There are two reasons. First of all, it is an exponential growth of the two most popular cryptocurrencies bitcoin and ethereum, that happened this spring. Secondly, it is ICO boom, a process when a company raises funds by issuing and selling its own crypto tokens. Many opinion leaders in the financial and banking sector, politicians across the world, celebrities started talking about bitcoin and blockchain.
What stands behind increasing popularity of ICO? Is it really all about rapidly growing exchange rates?
Of course not. Exchange rates in this case only sparked the interest of the community and investors. In my opinion, the real engine of ICO is its speed and budget compared with the usual investment standards: venture-capital-backed IPO or a classic IPO. Many start-ups have realized that low costs and legal uncertainty made it possible to strike while there's more gold than iron.
How legitimate are cryptocurrency trading and participation in ICO? What are the main regulatory trends across the world nowadays and what legislation can we expect here in Russia?
Trading cryptocurrency on exchanges is legal in the vast majority of countries. It's another matter however how exchanges deal with their status, whether they have a license, whether they pays taxes. I would recommend to use only certified services. Although this does not save users from the risks caused by the ambiguity of the legal field. The participation of individuals in the ICO also does not violate the laws of most countries, but it must be remembered that, after having received a profit, it is necessary to pay taxes. It is applied to those countries where profit from cryptocurrency investments is provided by the law. Regulation may vary significantly in different countries. But still the general trend can be described as regulation, not prohibition.
Buying a cryptocurrency or participating in an ICO – is it worth investing?
Despite some scandals with ICO-failures, scam projects and self-inflicted hacker attacks, buying tokens via ICO remains an interesting method of investment. With its low entrance threshold, it is only important to choose the right project. In the worst-case scenario, you can get experience, if it goes well – you'll be able to raise your capital in a short time.
Do you yourself invest in cryptocurrency or participate in ICO? If so, what strategy do you use?
I invest in projects that can be of real use to the industry, I also always carefully read White paper – a public fundamental document that informs about all project's features.
Although forecasts is a thankless task, but anyways, in your opinion, what will be the price of bitcoin in 2020?
I wouldn't be so optimistic as John McAfee ( ed. John McAfee predicted that bitcoin will reach $500,000 within three years ), but I assume that the price of bitcoin will surpass $20,000.
Do you believe that the emergence of cryptocurrencies and their growing popularity will stimulate the processes of globalization?
Certainly. This process has already been launched, and the popularity of cryptocurrency and blockchain is just another proof of this.
Dmitry Machikhin specializes in legal support of start-ups and cryptocurrency projects. He has a solid experience in launching international business projects and in legal support for ICO, he is the author of numerous articles on cryptocurrency and blockchain, as well as a consultant and a blockchain-expert at the start-up accelerator GVA LaunchGurus.
Interviewed by Emilia ROMAGNA