A British analyst has recently said that digital currencies are at a high-speculative risk. Many people have predicted since the beginning of the crypto revolution that investing in a digital currency can be highly risky.
The United Kingdom’s Financial Conduct Authority (FCA) has warned that electronic currency investors are at a danger of losing all of their money. As per an analyst from the UK, investment in digital currencies also pose a compounded risk of scam.
The last few days have been quite dizzying for many cryptic coins. In fact, yesterday, the value of Bitcoins depreciated by almost 20%. Thus, the value of Bitcoin came down to $30,000. Few days back, the value of bitcoin was more than $40,000 per unit. The high fluctuation in the value of Bitcoins may be a worrying situation if you are not an institutional and experienced investor.
Under the same framework, a British specialist and analyst claimed that investments and loan products related to cryptocurrencies like Bitcoins can be in the “Very high risk” category. As per a warning by FCA, if consumers want to make an investment in digital currencies, they must be ready to lose their investment and money.
FCA also opined that cryptocurrencies belong to the category of “High-risk speculative investments.”
Those who buy cryptocurrencies should try to understand what they are investing in and the risk associated with the investment. Consumers should also know that regulatory protections are not applicable in case one plans to invest in cryptocurrencies.
As per a statement by Laith Jalaf, who is a financial analyst, sudden growth in the rate of bitcoin can also create a marker bubble.
Regulators in the UK are clearly concerned about the high risk associated with the crypto asset. In addition to the highly versatile nature of the cryptocurrency, it also leads to scam activities. Many unregulated companies are also targeting customers with different types of marketing collateral.
On one hand where many analysts are saying that investment in bitcoins may be risky, big companies like JP Morgan are promising a future for cryptocurrencies. Asper Analysts at JP Morgan, the price of bitcoin can rise as much as $146,000 and it can easily compete with the value of Gold. It has also the potential to become an alternative currency.
Thus, making an investment in bitcoin should totally depend on the customers and their personal will. Or else, they won’t have any regulatory backup that will save them after the scam and high-scale loss.