Bitcoin News: Bitcoin investors have worrisome news, as Savers ploughing their money into bitcoin and other cryptocurrencies should be prepared to lose all of their investment, the City watchdog has warned. The volatile Bitcoin price slid from an all-time high of almost $42,000.
The volatile nature of crypto assets was highlighted again on Monday as bitcoin dropped 28% from Friday’s record high of $42,000, having doubled its value in less than a month. Despite the day’s decline to $30,200, bitcoin is still only at its lowest level since the first day of the new year.
The cryptocurrency mania has also attracted the watchful eyes of financial regulators across the world. They worry that amateur investors could be sucked in only for cryptocurrencies like Bitcoin to collapse in value, as Bitcoin did in 2018.
As per Britain’s Financial Conduct Authority statement-” Consumer must be prepared to lose all their money if they invest in such types of products.
The watchdog said it was worried by some firms offering investments in or products linked to cryptocurrencies as they seek to capitalize on the rally. “Significant price volatility in crypto assets, combined with the inherent difficulties of valuing crypto assets reliably, places consumers at a high risk of losses,” it said. It added that “the complexity of some products and services relating to crypto-assets can make it hard for consumers to understand the risks.” “There is no guarantee that crypto-assets can be converted back into cash. Converting a crypto asset back to cash depends on demand and supply existing in the market.”
Memories of the collapse in Bitcoin’s price from late 2017 to early 2019 – when it dropped from almost $20,000 to below $4,000 – are weighing on regulators.
The FCA also stressed that cryptocurrencies such as Bitcoin are largely unregulated. It said investors would be unlikely to have recourse as compensation or complaints “if something goes wrong. “Regulators are attempting to tighten rules about cryptocurrencies. Since Sunday, the FCA has required all UK cryptocurrency firms to register with it, as part of regulations designed to tackle money laundering. The US Financial Crimes Enforcement Network in December floated the idea that companies could be required to collect information on the holders of cryptocurrency wallets. Twitter CEO Jack Dorsey, who also runs the payments company Square, is among the critics of the idea, suggesting the unregulated nature of cryptocurrencies is one of the main attractions of the market.