The mainstream adoption of cryptocurrencies, like Bitcoin and Ethereum, is understandable, as traders and institutional investors are turning to the digital assets in a bid to maximize investment and earn massive profits.
However, the adoption is not thorough as a few financial bodies have recently been issuing a warning to those investing in the space, warning that the price volatility and non-insurance nature of the digital assets mean that investors could lose it all at a glance.
Unfortunately for the cryptocurrency, UBS, a global asset and investment firm, has now joined the financial institution list that has now warned investors about the unstable nature of the cryptocurrency assets.
Cryptocurrency investments could go from Zero to Hero and vice versa
The rising prices of cryptocurrencies like Bitcoin and Ethereum have been attributed to the growth and the broad stream adoption of these assets, which were overlooked by all a few years ago. With about 150 years of investment experience, the Swiss-based firm believes that the appreciating prices of these assets in a short time should be suspicious, particularly to investors who understand the growth nature of the typical investment. The wealth management firm believes that the unregulated nature, lack of insurance, and fluctuating prices of these digital assets means that investment could go from hero to zero at a glance.
Micheal Bollinger, the CIO of the firm, in his official post, had compared the digital assets to popular firms like Myspace and Netscape- who enjoyed boom success in a short period and disappeared afterward. In his statement, the investment officer does not condemn the cryptocurrency assets but warns that investors and institutional investors should not commit all their funds in the assets, but a portion of it.
If lost, it will not have any significant effect on them or their organization. In Bollinger’s statement, the investment guru disagrees that many people rely on cryptocurrencies to make payments now. He argues that local currencies continue to lead the way in gains across many nations with the recent data he possesses.
Crypto investors continue to be deterred
In a bid to enlighten the investors, the last few weeks have seen many financial regulators issue out warning to crypto investors about their thoughts on the digital assets. The recent boom of the cryptocurrency space is attracting more than ten times the number of investors and at least three times the number of institutional investors it did, barely 24months ago. These factors might have been why these financial regulators see the need to enlighten the public about the nature of these assets.
The UK Financial Conduct Authority (FCA) earlier this month issued a warning to investors that they should be careful about the booming nature of cryptocurrencies like Bitcoin, which its plummeting prices in the past few weeks could drastically drop. The New Zealand Financial Markets Authority (FMA) shared the same notion as the European financial regulator. It warned investors that committing their spare funds on cryptocurrencies could save them heartbreaks peradventure the industry collapse, which may or may not happen.