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Bitcoin Never Sleeps, can the Regulators and Investors afford to?

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The problem with Crypto is that you have very little time to rest. Unlike Tesla shares, Bitcoin’s prices can fluctuate on Saturday night, Friday after work and even on Sunday when you are out taking a walk. Bitcoin Never Sleeps. The Regulator and individual Investors do.

Many of you may have been glued to various Crypto exchanges over the last few weeks. Watching the Crypto currency first smash the magic $20k barrier, then stride through the $30k barrier and then finally peak at just over $41,000.

Feels like Christmas 2017 all over again.

If anybody had failed to hear about Bitcoin in the last few years, the end credits to 2020 was the moment when global awareness of crypto also peaked. Now more people than ever, all over the world will be asking: “Should I buy, or should I sell?”.

Of course, many of the team at the Financial Conduct Authority (FCA) will probably remember the last peak that Bitcoin hit back in December 2017. Perhaps some of them have been holding Bitcoin since then as well?

This time the peak came on the 8th of January, and perhaps the FCA might have released a statement a few days before the peak, rather than on the Monday morning following the peak.  Surely the thought of thousands of new Crypto investors getting burnt like last time round motivated their statement at least a little.

First-time Bitcoin Investors

In December we covered a story with Tradingview where we showed that since April 2020, hundreds of thousands of people have started to take their financial freedom into their own hands. Granted, most of them chose Tesla in the story, however, Bitcoin was already on an upward trajectory at the time.

Tradingview is geared to users who want to spend time researching and make an ‘informed decision’, not to just place a quick bet. Good investors do their research, they spend time learning about what they invest in.

Yesterday, the FCA released their latest message about the dangers associated with cryptoassets. On first glance, it wasn’t entirely clear who they were targeting with the Article:

“The FCA is aware that some firms are offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns.”

We could only imagine that the FCA was writing about spam messages that many of us have been receiving over the last few weeks, like the one below (which #DisruptionBanking does NOT endorse):

Now, if you are really going to be taken in by someone like @BrightFamous4 then, yes, perhaps you need to be prepared to lose all your money. But there is a huge Crypto community out there, and not just on Facebook forums. It doesn’t take long to reach out to others and learn more about how to invest.

When we started to understand Bitcoin, back in 2016, many of the Crypto community unselfishly gave insights into how best to navigate the new asset. From where the location of my nearest Bitcoin ATM was to why and which exchanges were the safest, users were more than keen to help.

One of them was BitcoinGarden, who are still offering advice to first time investors, over 4 years since we first exchanged messages with them:

#DisruptionBanking ran a poll on several Facebook groups this week. Some of the groups we used were: Forex Traders Community and Bitcoin & Crypto – United Kingdom.

From over 100 responses to our poll, it seems that many individual investors are doing the right thing. Most of the responses confirmed that people are using exchanges such as Binance, Luno, Coinbase and Kraken. All of which are safe for use by UK and other global investors.

There were a few exchanges listed that we didn’t recognise, but if you want to buy Bitcoin and the exchange you are using is registered in the Virgin Islands or some such place, then the risks are definitely there.

“Investing in cryptoassets, 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 statement continues.

Is Bitcoin better at being Gold than Gold?

Over the weekend the papers were full of stories about Bitcoin, one of the stories that caught our attention was a small piece about how Bitcoin might be the new gold:

Yesterday we wrote about the Bonds market and inflation in 2021, and for all the hype, it does appear that Gold will still offer a healthier rate of return than many of the bonds out there at the moment. Oh, and the risks are probably low too.

For all that Bitcoin is so flexible and can be divided into millions and millions of little virtual pieces, the same couldn’t have been said about Gold… till recently.

Glint Pay Ltd. is a UK-based fintech company that uses gold as an alternative global currency to enable its clients instantly to buy, sell, save, spend and now, share their physical gold and other currencies, through the Glint Mastercard® and Glint App.   

We spoke to Jason Cozens, Founder & CEO of Glint about this:

“The FCA’s warning to UK consumers over the risk of Bitcoin’s volatility suggests there is real concern from the financial establishment over crypto entering the mainstream.  The financial system has punished savers for years, with historically low interest rates and the insidious creep of inflation hitting consumers’ purchasing power and forcing many to risk everything through speculative investments, such as Bitcoin and the stock market, just to ensure that their wealth remains at its current level. Bitcoin’s rise is symptomatic of this.” Cozens shares.

“Consumers want an alternative to ensure that their finances work for them. Currently, Bitcoin appears to be the in-vogue option, but it requires considerable financial knowledge and a huge amount of time with almost constant attention needed to buy and sell at the correct time and avoid hitting returns. Whilst not offering the risky, overnight gains of Bitcoin, gold is once again demonstrating its considerable value as the ultimate safe haven, with steady long-term increases to mitigate against risky investments and almost non-existent interest on cash savings.”

If your nerves are not strong enough to navigate the Crypto landscape then, there is a very innovative alternative.

If you have dipped your toes into Bitcoin though, don’t get nervous by the FCA message. The behaviour of Bitcoin this week is nothing new, has happened before and will happen again.

But don’t listen to us, the team at Change Invest know far more about these things than we do:

The best way to have a healthy portfolio is to diversify. Never put all your eggs into one basket. Consider Bitcoin and Gold, and not just one or the other. That might be where the smart money ends up. And remember, Bitcoin Never Sleeps…

Author: Andy Samu

#Crypto #Bitcoin #FCA #Regulator #Glint #Investor #Cryptoassets #Binance #Luno #Coinbase #Kraken