The Financial Conduct Authority has warned against betting the digital currency Bitcoin

FCA warns against betting on the Bitcoin bubble

The Financial Conduct Authority has warned against betting the digital currency Bitcoin

The Financial Conduct Authority has warned against betting the digital currency Bitcoin

The City watchdog has urged punters not to bet on online currency bitcoin – warning they could be at risk of huge losses if they get caught out.

Bitcoin has rocketed in value in the past 12 months from $721 to $6,483, sparking an investment craze backed by celebrities such as football manager Harry Redknapp.

But it is prone to huge price swings, plunging 15 per cent in a few hours on Saturday before rapidly recovering.

The Financial Conduct Authority has now warned against betting on the currency using so-called contracts for difference, complex financial instruments which allow novice investors to guess whether the price will go up or down.

Punters could lose up to 50 times their deposit if they get it wrong, meaning they could rapidly rack up huge debts.

The FCA said CFD traders are ‘at risk of suffering significant losses and potentially losing more than you have invested’.

There are concerns that a bubble is building up in the bitcoin market, which is almost completely unregulated.

Senior business figures have said they are worried about the risks, including JP Morgan boss Jamie Dimon, who described it as a ‘fraud’.

Posted on; DailyMail>>

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