Bitcoin buyers should prepare to lose all their money, says regulator

People buying bitcoin should be prepared to lose their money, according to a senior UK regulator.

The price of the cryptocurrency has been soaring in recent weeks. With that has come many new investors, hoping to make money from the surging interest in the virtual currency.

But others have warned that the rocketing value of bitcoin can only be temporary, and that it is stuck in a bubble. That could eventually come to an end in a spectacular burst, warned Andrew Bailey, head of the Financial Conduct Authority.

He has given a “serious warning” that people investing in the cryptocurrency should be ready to lose their money.

We know “relatively little” about how the prices change and so we should expect it to stay volatile as it has been over recent months, he cautioned. But that volatility could eventually be the result of a dramatic plunge, which would leave many people invested in the cryptocurrency out of pocket.

“It’s not a currency, it’s actually not regulated in its Bitcoin form,” Mr Bailey said in an interview for Newsnight. “It’s a very volatile commodity in terms of its pricing.

“If you look at what has happened this year, I would caution people. We know relatively little about what informs the price of Bitcoin.

“It’s an odd commodity as well, as the supply is fixed. If you want to invest in Bitcoin be prepared to lose your money – that would be my serious warning.”

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2 Replies to “Bitcoin buyers should prepare to lose all their money, says regulator

  1. I was offered the ‘opportunity’ two years ago to buy at $10 a bitcoin, and could, if I had invested a mere £600, have been a millionaire now, but did not invest as I recognized it to be a simple scam that would defraud the vast majority, a thoroughly bad thing. How can society continue to exist if everyone callously rips everyone else off like that at the slightest opportunity like a pack of frenzied cannibalistic Piranhas?

    How many nuclear power stations do the transations require to keep the thing running? What pays for all the electricity? The whole thing will definitely collapse when the overly massive elecricity bills cannot be paid by current Bitcoin commission levels. And that is just one of several very clear reasons why Bitcoin has to collapse.

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