It’s business as usual for Indonesia’s cryptocurrency investors

For many, it is simply too lucrative an opportunity to pass up. Some have reported doubling or tripling their profits in less than a year.

A college kid, obviously a newbie, even claimed profits 45 times the initial investment.

David Kurniawan, who works at a mobile intelligence company, is a case in point.

The 27-year-old said he had made US$1,060 in profit on his $2,733 investment in Ethereum, a cryptocurrency originating from Russia, in the space of only seven months.

Compare that to 5 percent you would earn on a time deposit in a year, or the average of 10 percent profit on stocks, then you get the picture.

Ethereal was quoted at $393 a coin when David started, and now it is $944.

“Buy low, and sell high,” he said, adding that it was not all that different from investing in gold, real currencies and stocks.

Good advice for anyone contemplating to play in the cryptocurrency market: Watch the market closely. No one can rule out a bubble.

The volatility of bitcoin, the most popular cryptocurrency, has shown that trading is not exactly for the faint of heart and the reason why Indonesia, among other countries that include China and South Korea, have moved to ban cryptocurrency.

Starting at $9.37 at its launch in 2009, it jumped to $60.89 in March 2013 and to $936 in January 2017.

It reached its peak at $19,203 on Dec. 17 but has since been dropping. On Friday, it was still worth $11,470.

Bitcoin is one of 48 cryptocurrencies now being traded globally. Besides Ethereum quoted at $1,159 on Friday, other popular coins include Litecoin ($182.08), Zcash ($463.8) and Dash ($ 801.65).

The Cambridge Center for Alternative Finance said there were around three million active cryptocurrency users worldwide in May 2017.

But PT Bitcoin Indonesia said in December that 900,000 Indonesian users have traded in its currency in the last two years. It also claimed to have a 70 percent share in the Indonesian cryptocurrency market.

Aladincoin, a cryptocurrency issued by the United States-based financial institute Aladin Capital, held a conference last week to announce its entry into the Indonesian market, with claims of having the support of the World Bank.

The government had initially warned people about huge potential losses in cryptocurrency trading, but in December the central bank moved to ban it outright.

Any payment using cryptocurrency would be considered illegal because it violated Law No. 7/2011 on currency that states that the rupiah was the only legal currency for transactions in Indonesia.

Administrative sanctions would be leveled at financial services that facilitate these transactions.

“There are no regulators or administrators supervising bitcoin,” Bank Indonesia Governor Agus Martowardojo recently said. “Its value is not based on any underlying economic fundamentals.”