By Benjamin Umuteme
Abuja with Agency report
In what appears not to be cheering news for Nigerians engaged in crypto currency trading, Britain’s Financial Conduct Authority have warned that people could lose all their money if they continue to invest in bitcoin as it is not real currency.
Bittrex, Bitfinex, and CEX.io have halted trading, experienced outages, and crashed during periods of high volumes and demand as they struggled to keep up with the breakneck growth of the crypto-market and eye-popping volumes. Part of that pressure has been driven by hundreds of thousands of new market entrants. Earlier this month, several exchanges have
In an interview, Andrew Bailey, head of the Financial Conduct Authority (FCA), Andrew Bailey told the BBC that cryptocurrency was not a secure investment and was similar to gambling.
Bailey noted that neither central banks nor the government backed bitcoin, making it high risk.
According to him, the use of the term “currency” to describe bitcoin was misleading, and was causing people to regard it as a “fiat currency.” A fiat currency is backed by a central authority, which is “what preserves the value of the currency through the actions that central banks take,” said Bailey.
“It’s not a currency, it’s actually not regulated in its bitcoin form,” Bailey told BBC Newsnight. “It’s a very volatile commodity in terms of its pricing. If you look at what has happened this year, I would caution people,” he said.
“If you want to invest in bitcoin be prepared to lose your money — that would be my serious warning,” said Bailey.
Bitcoin has soared in value this year, rising over 1,000% against the dollar so far. This has prompted both increased interest and concern from investors and financial executives. Bitcoin was near its all-time high point on Friday morning, at $17,176.
Bailey said relatively little was known about what drives the price of bitcoin. He described bitcoin as a commodity, which he said financial regulators did not currently oversee, and denied regulators were being left behind by new technology.
He also pointed to the fact that bitcoin buyers and sellers are anonymous, something that has caused concerns that it is being used to facilitate financial crimes and launder money.
