interactive investor comments as FCA urges investors to be cautious over products offering high returns.
Commenting on the Financial Conduct Authority’s note this morning warning investors of the risks of investments advertising high returns based on cryptoassets, Myron Jobson, Personal Finance Campaigner at interactive investor, says:
“There is no denying that cryptocurrency is gaining more mainstream attention thanks to the stratospheric rise of Bitcoin, the first and best-known cryptocurrency, in recent history. Argo Blockchain (LSE:ARB), a publicly-traded blockchain technology company focused on large-scale cryptocurrency mining, was the most-bought investment on interactive investor since the start this year (to 8 January 2021).”
“In its ascendency, Bitcoin has also brought many lesser known cryptoassets out of obscurity. The worry is that FOMO (fear of missing out) investors, won’t look before they leap and, encouraged by glossy marketing hooked on the meteoric rise of Bitcoin, invest in cryptoassets which are a highly complex, high-risk and relatively new area of investment.
“The performance of Bitcoin is hard to ignore, but we have seen all this before in 2017, and it’s come crashing down to earth. While it’s always tempting to believe that ‘this time it will be different’, the fact remains that the asset is notoriously volatile - and for many investors, the price swings have been simply too wild to stomach. But whatever your approach to risk, crypto currency should only be a tiny proportion of a portfolio.”
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