{"id":109179,"date":"2021-01-22T11:07:23","date_gmt":"2021-01-22T11:07:23","guid":{"rendered":"https:\/\/precoinnews.com\/?p=109179"},"modified":"2021-01-22T11:07:23","modified_gmt":"2021-01-22T11:07:23","slug":"bitcoin-uproar-as-investors-warned-of-rapid-collapse-in-value","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/bitcoin-uproar-as-investors-warned-of-rapid-collapse-in-value\/","title":{"rendered":"Bitcoin uproar as investors warned of ‘rapid collapse’ in value"},"content":{"rendered":"
The cryptocurrency is in the midst of its worst week since March last year as some analysts fear for its future. Bitcoin fell as much as 6.8 percent to about £23,000 before hitting £30,000 on January 8 – but has since sunk further to around £21,000. Currently at £25,000, the constantly changing value is leading to concern from some. As Bloomberg reported today, the swings are reminiscent of 2017, when the cryptocurrency entered a “rapid collapse”.<\/p>\n
With some fearing another crash could be on the horizon, 2017’s Bitcoin blow-up could be set for a repeat.<\/p>\n
When the crash occurred in December 2017, the cryptocurrency lost a quarter of its value in one day’s trading.<\/p>\n
Its value slumped to around £8,500 at one stage, with one researcher warning at the time that new traders could be put off by the unpredictability.<\/p>\n
Jasper Lawler, head of research at London Capital Group, said: “Bitcoin investors were introduced to the law of gravity over the last 24 hours.<\/p>\n
“Long term holders will be used to this level of volatility but newer crypto traders could be permanently put off.<\/p>\n
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“The exponential price rise seen recently needs new investors to sustain it. In a bubble market it’s known as the ‘bigger fool’ theory; you can buy high as long as there is a fool willing to buy it off you even higher.”<\/p>\n
Now, fresh warnings are being dealt to traders after yet another seismic drop in value.<\/p>\n
The value of Bitcoin dropped by 20 percent over the weekend, provoking Britain’s Financial Conduct Authority (FCA) to warn investors of the risks.<\/p>\n
They said: “If consumers invest, they should be prepared to lose all their money.<\/p>\n
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.<\/p>\n
“Significant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.”<\/p>\n
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FCA’s executive director of enforcement and market oversight Mark Steward also spoke to the This Is Money website about Bitcoin.<\/p>\n
He added: “There are potential benefits to crypto assets, such as in cross-border payment services, and the Government is holding a consultation on how these can be harnessed.<\/p>\n
“But we should be in no doubt there are real risks to these investments.<\/p>\n
“Anyone interested in crypto assets should remember: promises of high profits mean high risks. Only invest money that you can afford to lose.”<\/p>\n
Bitcoin was invented in 2008 by an unknown person. The cryptocurrency has no central bank or single administrator and can be sent from user to user on the peer-to-peer network without the need for intermediaries.<\/p>\n
DON’T MISS <\/source><\/p>\n <\/source><\/p>\n It isn’t known for sure how many people use Bitcoin, but two of the largest wallet providers, Coinbase and Blockchain.com, have over 35 million users and 59 million wallets respectively.<\/p>\n Bitcoin divides opinion – entrepreneur Elon Musk said last week that he would never turn down being paid in the cryptocurrency.<\/p>\n But Berkshire Hathaway CEO Warren Buffet once said he would never own a cryptocurrency.<\/p>\n He said in February last year: “Cryptocurrencies basically have no value and they don’t produce anything.<\/p>\n “I don’t have any cryptocurrency and I never will.”<\/p>\n Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.<\/p>\n
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