One of Britain’s leading financial regulators recently issued a stunning warning to people to be ready to lose all their money, if they continue investing in cryptocurrencies such as Bitcoins. According to Andrew Bailey, the head of Financial Conduct Authority, since neither central banks nor the state governments support the bitcoin currency; it’s not a safe or secure investment to venture into in this era of the volatile business environment.
Bailey compared Bitcoin to gambling and according to him; they carry the same level of risks. He also said that since Bitcoin is not a form of currency, it’s not regulated and therefore it’s an extremely volatile commodity in terms of prices. Basing on bitcoin’s performance in 2016, it’s important to be wary of the cryptocurrency industry. Let’s elaborate some of the reasons why one should not consider investing in cryptocurrency markets:
Bitcoin and other cryptocurrencies involve very high risks and uncertainties since their prices are extremely volatile. Majority of the market analysts are very skeptical about bitcoin as an investment because the industry lacks crucial data and information to be analyzed. According to Vivek Belgavi, of PwC, there is nothing tangible about bitcoins that can allow analysts to study the trends for investment. Therefore, people rely on imperfect information and speculations which are quite misleading.
It’s Neither a Commodity Nor Currency
Bitcoin lacks clarity about its origin and its real form and hence it becomes a big problem. Furthermore, the digital industry is not regulated by any government and hence it becomes a very risky venture for businesses, industry, and individuals to invest in it.
No Credible Data or Information
Several global bankers and industry experts have warned investors against venturing into cryptocurrencies since it’s just like a bubble that is about to burst and blow people’s huge investments. Digital currency is also not a good investment for people who don’t understand the industry.
There is no authority controlling the cryptocurrency business especially if one has grievances. If your transaction involving bitcoin goes sour, it’s quite impossible to claim your money back.