AT 25, Romeo Bonsocan is one of the few among his peers who invested in bitcoins, albeit in a small amount.
Like him, some Cebuanos are starting to take an interest in bitcoin, a form of cryptocurrency that has registered massive growth in recent weeks to reach nearly $18,000 for one bitcoin this week.
Bitcoin is an electronic currency created by painstaking mathematical computation. It is “electricity converted into long strings of code that have money value,” which no central bank has control over.
Out of sheer curiosity, Bonsocan gambled his P1,000 last Oct. 15, which he converted to bitcoins through Coins.ph, a BSP-registered electronic money issuer and remittance agent.
“I invested in bitcoin with a very minimal amount because I just wanted to check if this works. I have a tendency to check what’s new and experimental. Interestingly, it worked. The value of bitcoin has gone upwards in just a matter of weeks. In November, things have been moving faster than I ever imagined,” the young writer told SunStar Cebu.
At the beginning of 2017, the cryptocurrency was priced at $968 per coin last Jan. 1. To get started in bitcoins, one can buy in small amounts, such as less than one bitcoin (0.0001 bitcoin).
Michelle Varron, a Cebu-based investor for Coinage.ph, was first fascinated with bitcoins in 2011. The price of one bitcoin at that time was $5 or roughly P250, she recalled.
“I went into this space because new technology excites me. Bitcoin presented a great vision for the future, the potential for something that could improve money and finance, and I wanted to be part of it,” Varron said. Back in the day, she researched about bitcoins and met with like-minded people to learn more about the digital asset.
In 2012, she co-created Coinage.ph with Anthony Chua, an order book exchange where one can buy and sell bitcoins at their own price. Currently, her company is working for a BSP license, alongside some 12 other bitcoin-related businesses.
In a press briefing Wednesday with Manila-based reporters, BSP core information technology specialist group head and deputy director Melchor Plabasan said bitcoin transactions during the first six months of 2017 averaged $8.8 million a month, or an increase from $2 million in 2015 and $6 million in 2016.
The BSP data was based on the activities of two bitcoin exchanges in the country earlier allowed to operate by the central bank, namely Rebittance Inc. and Betur Inc., also known as Coins.ph. Plabasan said 12 virtual currency exchange applications remain pending with the central bank.
According to Varron, there are many ways to acquire bitcoin. One is to buy it from exchanges, wallets, and brokerages. The other option is to earn it, by asking people to pay for a product or service with bitcoins.
In the Philippines, bitcoins are benefitting overseas Filipino (OFW) remittances by bringing down the charges, or eliminating transaction charges banks ask for.
But in developed economies like Japan where bitcoin adoption is high, others are already using bitcoins to buy coffee, food, and shop, said Varron. She said even luxury condominiums in Dubai are being sold for bitcoin. A Lamborghini outlet also accepts bitcoin as payment for their cars.
Changeable
Despite this increasing bitcoin value and fast-rising fame, a banker and a trade official advised the public to exercise caution when investing in bitcoins.
Not that it is fraudulent, they said, but it is a highly volatile investment. It is a risky investment with a history of volatility.
“My only advice is we should not invest in something we are not familiar with or if we do not know what it is. In every investment, we must know the underlying trade, business or service. If there is none, we must be careful because how can its value increase?” said Cebu Bankers Club past president Maximo Rey Eleccion.
The banker said that while he does not encourage nor discourage the public from investing in bitcoin, it is important that they know what they are investing in.
Department of Trade and Industry (DTI) Cebu Director Maria Elena Arbon agreed with the advice, adding that those interested can start with small amounts until they grow comfortable with the mechanics.
“Maybe experiment with a small investment and grow this as one becomes more comfortable and understands it better. Bitcoins and cryptocurrencies are still evolving and people are attracted to it because of the steep rise in value,” the local trade chief said.
“There are risks and security issues involved and people should be aware of these risks before jumping in hook, line and sinker,” she added.
As a bitcoin investor herself, Varron cautioned others about its volatile nature. “When you invest in bitcoin, you also participate in a market where it could go up or go down. If it goes up, you make investment gains. Bitcoin also has a history of high volatility. So people need to be careful,” she noted.