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Financial Conduct Authority Warns on Bitcoin

by | 15 Dec, 2017

Andrew Bailey (right) walks with BoE Governor Mark Carney, Deputy Governor Jon Cunliffe and former policy Chief Spencer Dale at the Bank of England headquarters in London, 2014

Bitcoin is purely a gamble and investors should be prepared to lose everything they have invested in it, according to the head of Britain’s Financial Conduct Authority.

Speaking to Newsnight, Andrew Bailey told the BBC economics Editor Kamal Ahmed that because neither central banks nor the government stood behind the cryptocurrency, it was not a secure investment.

Bailey said, “It’s not a currency, it’s actually not regulated in its Bitcoin form”. He added, “We know relatively little about what informs the price of Bitcoin.”

“It’s a very volatile commodity in terms of its pricing.”

“If you look at what has happened this year, I would caution people.” “If you want to invest in Bitcoin be prepared to lose your money – that would be my serious warning.”

Mr Bailey also touched on the topic of regulation and denied that regulators were being left behind by the new technology of cryptocurrencies. He said, “The decision on what we regulate is appropriate for government and Parliament.” Bailey added, “If Parliament wants to go further we will happily provide the evidence we have and will support the decision they want to take.”

His opinion is one of many shared by senior policymakers across the world who have demonized the asset class, and have hinted of more regulatory oversight in order to try and control the fledgling market. Further government interjection in the cryptocurrency market could bring prices down further.

Today Bitcoin prices are finally rallying closer to the $18,000 mark (see the chart).

According to data from Coinmarketcap, the total market capitilization for all the cryptocurrencies reached a new all-time high of $518 billion yesterday. Bitcoin alone counts for about 54% of the total market.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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