Financial Conduct Authority: You could lose everything if you buy Bitcoin
Savers stacking money in cryptocurrencies should be ready to lose it all, watchdogs warn
Risky: Bitcoin is up around 70 percent
Savers stacking money in cryptocurrencies should be ready to lose it all, watchdogs have warned.
The city’s financial regulator (FCA) said demand for digital coins like bitcoin rose this month as the turmoil in the banking sector wreaked havoc on global markets.
And while the FTSE 100 index fell more than 6 percent in March and the index of top European banks fell 20 percent, Bitcoin is up around 70 percent.
Last night it traded at around $28,000, well above its 2023 bottom of $16,500 but a far cry from the 2021 high of nearly $70,000.
Ethereum’s value has also risen by a quarter since the Silicon Valley Bank (SVB) collapse earlier this month as investors seek to diversify away from traditional markets towards the unregulated crypto world.
“We have seen evidence of recent increased demand and social media hype encouraging purchases of crypto assets,” said an FCA spokesman. And in a stark warning to investors, the regulator’s spokesperson called crypto a “high-risk investment,” telling the Mail, “If you decide to buy crypto, be prepared to lose all your money.”
Experts also warned savers to “put all their eggs in the crypto basket” as the banking downturn fuels the Bitcoin rally.
Russ Shaw, head of Tech London Advocates, which represents tech start-ups, said: “I don’t think people should invest their entire fortune in crypto, it’s just too risky, lacks transparency in certain areas and can be extremely volatile .’
Crypto is known for its volatility, as evidenced by a series of high-profile collapses — including cryptocurrency exchange FTX in November — that wiped more than $1 trillion from crypto’s market cap over the past year. Walid Koudmani, chief market analyst at brokerage XTB, said dwindling confidence in the banking system is playing into crypto’s hands.
“I think caution should always be exercised in this volatile market,” he said, explaining how some people view crypto as a “safe haven” — particularly those who are “challenging the entire financial system.”
“I would say don’t put all your eggs in the crypto basket.”
A spokesperson for CryptoUK, the trade association for the crypto-asset industry, said: “Investors’ desire to feel like they have a more democratized regime for their assets is a natural response to the fallout. We always advise all investors to conduct their own due diligence before pursuing any investment opportunity.’
https://www.dailymail.co.uk/money/markets/article-11899847/Financial-Conduct-Authority-lose-buy-bitcoin.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 Financial Conduct Authority: You could lose everything if you buy Bitcoin