Strategists at UBS Global Wealth Management, one of the world’s largest private wealth managers, warned investors about the risk of losing all their money amid a rally in the cryptocurrency market, Bloomberg reports.
The Swiss firm believes the industry will face significant risks in the long term.
Among the latter, they noted regulation and possible competition from central bank digital currencies (CBDCs).
“From our point of view, there is little to prevent the price of cryptocurrency from dropping to zero when a higher quality version is launched or if regulatory changes suppress market sentiment. Netscape and MySpace are examples of web-based applications that enjoyed widespread popularity but ultimately disappeared, ”said Michael Bollinger, UBS Wealth’s chief investment officer for global emerging markets.
UBS Wealth noted that cryptocurrencies may continue to grow in the near term due to market dynamics, institutional adoption and limited supply. However, experts advised cryptocurrency investors to “limit their investment to the amount they can afford to lose.”
Recall that the UK Financial Conduct Authority (FCA) has warned cryptocurrency investors about the risk of losing all their money. The regulator previously banned the sale of digital asset derivatives to retail investors.
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