The French banking and financial authorities are warning neophytes who would like to invest in bitcoin.
The price of cryptocurrency recently broke records. But the French banking and financial authorities warn investors who would like to convert their savings into bitcoins.
Invest in Bitcoin, the famous crypto-currency whose price has recently exploded all records in surpassing the $10.000 mark, before lose 20% a few days later… A juicy opportunity to grow your investments? A high-risk operation, rather. L'Autorité des marchés financiers (AMF) and the Prudential Control and Resolution Authority (ACPR), the supervisor of financial institutions, called in early December 2017 on French savers to demonstrate “the greatest vigilance” before investing in bitcoin, when the value of this virtual currency soars. In question, its volatility… but also the cybersecurity risks that the management of a portfolio of this type entails.
Bitcoin, a very risky investment
“The purchase/sale and investment in bitcoins are currently carried out outside any regulated market. Investors are therefore exposed to very high risks of loss in the event of a correction”, say the two organizations in a joint press release. “This currency has no official course. […] Given its high volatility, this market is risky”, points out the investment guide published by the AMF. On December 1, 2017, the Governor of the Banque de France, François Villeroy de Galhau, similarly warned against any investment in bitcoin, qualified as“speculative asset”.
And that's not the only risk posed by bitcoin. Cryptocurrency “operating only online, your assets are also kept online. It is up to you to protect the storage of your Bitcoins, especially in a situation of loss of support or cyber-attack”, also notes the AMF. So beware of intermediaries, notes the authority, which reminds that it is necessary to request the approval of the broker… and which reminds that derivatives backed by the price of bitcoin should be avoided if they are not understood. “These are highly risky speculative products”.
Source: French banking authorities advise against investing in bitcoin