Bitcoin falls by more than 20% as FCA warns about risk of cryptoassets

SourceSkyNews
SectorFinancial Markets
CountryMiddle east

Bitcoin plunged by more than 20% on Monday in a sign that investors are increasingly backing away from risk. The fall puts the cryptocurrency on track for its biggest one-day drop since March, when the COVID-19 pandemic was just beginning to shred global markets. At 5.30pm UK time, Bitcoin was at $30,500 - its lowest point since 5 January - having reached a record $42,000 on Friday. The Financial Conduct Authority warned that those investing in schemes promising high returns based around cryptoassets should be prepared to lose their money. The FCA said cryptocurrency investment generally involves very high risks and some firms may understate these risks and overstate the potential returns. The watchdog also said that for cryptoasset-related investments, consumers are unlikely to have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong. Laith Khalaf, a financial analyst at AJ Bell, said: "The regulator is clearly concerned that the high risks already inherent in cryptoassets are being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in cryptoassets. "You can see how the rapid price appreciation of Bitcoin, combined with ...read more...