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MANILA - An investor who saw a 39,000-percent increase in his bitcoin investment warned on Monday that many cryptocurrency investment schemes right now are scams.

Emerson Fonseca, Philippine head of NEM Foundation, told ANC's Market Edge that since he started trading bitcoin 2 years ago, a lot of scams have cropped up because people don't understand cryptocurrencies.

"What I can advise to the newbies is that they really need to study about cryptocurrencies and blockchain, because there are a lot of people that are trying to scam people and giving misconceptions about cryptocurrencies and blockchain," Fonseca said.

• Cryptocurrency scams now rampant says SEC

But besides the scams, a lot of companies have also been riding on the hype around blockchain technology and holding initial coin offerings or ICOs to fund businesses that were not practical or unsustainable, said another blockchain expert.

ICOs have recently become hugely popular among start-ups to raise funds online, offering self-created digital "tokens" or coins to any willing buyer.

• Initial Coin Offerings, the lawless land of cryptocurrency fundraising

Vincent Choy of the Blockchain Asia Forum said people need to understand why a company is raising funds through the ICO before investing money in its "tokens."

"When investing in a blockchain company, investing in an ICO, it's important to look at the white paper carefully. To evaluate exactly what this company is trying to do, what the technology they're doing is trying to achieve, and then evaluate for yourself whether or not you think this technology will really really help the business in order for you to make a good investment," Choy said.

Blockchain firms and experts on Monday formally launched the Blockchain Association of the Philippines, which aims to raise understanding and adoption of blockchain technology among businesses.

"We believe that blockchain, like internet in the 90s, has the ability to transform businesses," Choy said.