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Bitcoin continues its upwards march and is now nearing the milestone price of $18,000. People are buying Miami penthouses with Bitcoin and expectations for the popular cryptocurrency are at an all-time high with John McAfee declaring that Bitcoin will hit $1 million by 2020. However, not everyone is so optimistic about the surging digital currency, Wolf Of Wall Street‘s Jordan Belfort said Bitcoin is the “biggest scam ever” this week. Now a top financial market regulator says that investing in Bitcoin is like gambling and those who do so should be prepared to lose all of their money.
Andrew Bailey is the chief executive of the Financial Conduct Authority (FCA) that regulates financial firms and he believes there is great risk in investing in cryptocurrencies. The FCA is a financial regulatory body in the UK, but it is independent of the British government. The FCA says they are “responsible for regulating a sector which plays a critical role in the lives of everyone in the UK and without which the modern economy could not function. From children’s ISAs to pensions, direct debits to credit cards, loans to investments – how well financial markets work has a fundamental impact on us all.”
On Thursday, Bailey said, “If you want to invest in Bitcoin, be prepared to lose all your money.” Bailey added that buying Bitcoin was akin to gambling because it had the same level of risk. Bailey warned that the cryptocurrency was a potentially dangerous investment because of the lack of backing from governments and central banks. “If you look at what has happened this year, I would caution people … We know relatively little about what informs the price of bitcoin,” Bailey told the BBC.
This comes when bitcoin futures began trading on Sunday and the news this week that Swiss banking giant UBS would lead an Ethereum-based blockchain platform alongside other high profile firms such as Barclays, Credit Suisse, KBC, Swiss stock exchange SIX, and Thomson Reuters. However, Credit Suisse CEO Tidjane Thiam said the volatile currency is “the very definition of speculation and the very definition of a bubble.” Thiam added that investors were only buying cryptocurrencies “to make money.”
JPMorgan Chase CEO Jamie Dimon called Bitcoin a “fraud” and a scam that was only suitable for drug dealers, murderers, and people living in unstable countries. “If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in Bitcoin than US dollars,” he said. “So there may be a market for that, but it would be a limited market.” At the time of publication, the price of Bitcoin was up to an astounding $17,656.
[CNBC]