‘Just hold’
After that, be prepared to hold on through volatility, she says. “You don’t want to treat this like it’s gambling. You need to have a long-term perspective.”
“You need to have conviction in what you’re invested in, and just hold, and you know if you understand what it is that you’re investing in, then you’ll have that conviction, and you’ll be able to ride out the volatility.”
But don’t create a barrier for yourself by pursuing a complete understanding of this rapidly evolving space, she adds.
“Don’t wait until you feel like you 100 per cent understand everything to get your little, you know, half a percent of exposure because you’ve got to have some kind of openness to investing in the space.”
Former corporate regulator Greg Medcraft agrees with Ms White. Mr Medcraft, who ran the Australian Securities and Investments Commission until 2017 and has since worked on global digital asset policy, owns some ether and bitcoin. He says he bought ether, the cryptocurrency on blockchain ethereum, to “see how to create an NFT and other stuff”.
He says investors must remember two simple rules of investing: diversification and risk reward. “If it’s too good to be true, you may lose money, right?”
Back to Mr Carnegie, he agrees investors without crypto exposure have to “get off zero … so that you realise this is real”.
He suggests a “low single digits overall asset allocation, so less than 5 per cent of your portfolio”.
Investors should use a dollar-cost average method to be able to ride the ups and downs in market moves, he adds.
And Mr Carnegie favours ether over bitcoin, even though he owns both because he thinks ethereum, the blockchain underpinning ether, is going to be a more dominant part of the decentralised finance ecosystem.