“You should not invest money you cannot afford to lose,” this is the warning issued by European authorities against cryptocurrencies.
The warning comes amid the couple of weeks after cryptocurrencies like bitcoin plunged in value, European authorities reminded its citizen about the risks of investing in them.
According to European supervisory authorities which supervise securities and banking, Bitcoin and other virtual currencies “have shown clear signs of a pricing bubble” that could separate you from a lot of real currency.
On top of that, cryptocurrency exchanges can have operational problems without any legal recourse right now if you lose your shirt, the European Securities and Markets Authority (ESMA) said.
The exchange is done with just a simple hand gesture. thanks for the cryptocurrency transactions, called blockchain, which are already spreading far beyond financial transactions, into everything from tracking diamonds to quickly removing contaminated food from store shelves.
There’s a good chance that if you sunk a lot of money into cryptocurrencies as their value soared last year, you already also noticed as their valuations plunged this year. Bitcoin is trading at a value of about $9,000, less than half its peak above $19,000 in December.
“ESMA is definitely trying to shut the stable door after the horse has bolted,” said Toby Lewis, an analyst at Novum Insights.
“Hopefully their warning about lack of regulation of the sector will be followed up by moves towards intelligent regulation of cryptocurrencies,” Lewis said.