7 Dangers Concerning Bitcoin, According to Massachusetts Regulator
Top securities regulator from Massachusetts gives seven reasons why the volatile cryptocurrency known as bitcoin could be a worthless product.
William Gavin, secretary of the Commonwealth, has warned investors to not be influenced by the recent CBOE futures contracts in investing blindly into Bitcoin.
He claims this cryptocurrency is just a recent speculative bubble that will probably burst, causing average investors to end up owning a worthless product. In the opinion of Gavin, chasing the next best thing will most likely end badly for the average investor.
According to the statement, due to the feeling of legitimacy given by CBOE trading, investors must keep an eye out for risks and fraudulent schemes that come along with Bitcoin investing.
This Wednesday CBOE futures fell 2.7% to trade BTC at $17,530.
In concordance with Gavin’s comment, is Commission Chairman of U.S. Securities and Exchange, Jay Clayton’s warning that discouraged investing in cryptocurrencies.
Chicago Board Options Exchange (CBOE) began Bitcoin futures trading on the 10th of December, 2017. Bitcoin wallets and exchanges have been targeted by major hacks, causing many Bitcoin owners to lose their crypto assets.
Bitcoin continues to be the intensely monitored by the media as its prices continue fluctuating. Critics are divided on either sides, some calling it a bubble or craze while others regard it as a great investment opportunity.
Before getting into buying Bitcoins, Gavin makes some suggestions for investors to consider:
I. Bitcoins and other cryptocurrencies are not like fiat currencies, lacking regulation from governments or central banks.
II. Before purchasing Bitcoins from a seller, make sure to check his credentials. You want to find out what actions you can take in the eventuality of a bad outcome for you. Compare fees and cost that come with the purchase of Bitcoin and also look into the withdrawal charges for conversion into fiat currencies.
III. Virtual wallets used for BTC storing are not as secure as regular banking facilities. Lost funds can be unrecoverable if these wallets are hacked.
IV. Bitcoin’s price is very volatile and its fluctuation occurs in a short time span. Be prepared for drastic value changes, ranging from single day drops or a growth of thousands of dollars.
V. Bitcoin investing is not related to any economic or financial parameters, making it pretty much speculative. It is not advisable to speculate with money you cannot afford to lose.
VI. Bitcoin and other digital currencies are based on blockchains, a technology that is still experimental and prone to changes, errors or criminal attacks which could harm your virtual wallet or erase your bitcoins.
VII. The unregulated nature of Bitcoin has spawned many investment scams and financial frauds which are waiting to rob Bitcoin investors of their money.
If anyone wishes to check the registration status of a seller of Bitcoin or other Bitcoin-related products, may contact Secretary Galvin’s Securities Division at 1-800-269-5428.