The head of the UK’s Financial Conduct Authority (FCA) has a message for anyone thinking about investing in Bitcoin: only invest if you’re prepared to lose your money. In a recent interview, the FCA’s Andrew Bailey cautioned would-be Bitcoin buyers to invest carefully, since the current dramatic price increases for cryptocurrencies like Bitcoin could eventually end.
Bailey argued that there is little understanding about why the prices have been so volatile in recent months, and that instability should give investors pause. “If you look at what has happened this year, I would caution people,” he said. “We know relatively little about what informs the price of Bitcoin."
Bailey also said that the cryptocurrency is not actually a currency at all, but a commodity – which is why the FCA has not stepped in to regulate it in its current form. He suggested that it would be up to Parliament to decide whether regulations were appropriate. For now, though, Bailey said he was not pressing for that regulatory power, “providing people understand very clearly this is a very volatile commodity.”
"It's an odd commodity as well, as the supply is fixed. If you want to invest in Bitcoin be prepared to lose your money – that would be my serious warning."