FCA warns crypto investors 'could lose all their money' as bitcoin heads south

By Daniel Lanyon on Monday 11 January 2021

Savings and Investment

The UK financial regulator has made several warnings on crypto over the years as well as having recently banned the sale of crypto derivatives to retail customers.

FCA warns crypto investors 'could lose all their money' as bitcoin heads south
Image source: Photo by Crypto Crow from Pexels

Investors in crypto assets such as Bitcoin and Etherum should be prepared to lose all their money, the UK’s financial regulator the Financial Conduct Authority (FCA) has warned this morning.

Bitcoin has boomed in recent months, rising from a low of $5.3k in April 2020 to hit c.$40k last week but has dropped up to 20 per cent this morning.

“Investing in crypto assets, or investments and lending linked to them generally involves taking very high risks with investors' money. If consumers invest in these types of product, they should be prepared to lose all their money,” the FCA said. 

“As with all high-risk, speculative investments, consumers should make sure they understand what they're investing in, the risks associated with investing, and any regulatory protections that apply,” it added.

While bitcoin and other crypto assets have been volatile since their inception, more recently the market has shown some signs of being more accepted by the mainstream. Ruffer Asset Management, for example, a well known cautious multi-asset investor managing funds for many charities and other institutional investors said that it was dipping its toe into bitcoin across its £20bn portfolios with a £550m stake.

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