Amid the ongoing crash in the cryptocurrency market, the US government’s warning of the risks of investing in bitcoin no longer seems to be ridiculous. The most popular digital coin lost almost 50% of its value, dragging the rest of the market down.
In the middle of May, a few days before the collapse, the US Securities and Exchange Commission (SEC) called BTC a "highly speculative investment" and warned of the risks.
"The staff strongly encourages any investor interested in investing in a mutual fund with exposure to the bitcoin futures market, as discussed below, to carefully consider the risk disclosure of the fund, the investor’s own risk tolerance, and the possibility, as with all investing, of investor loss," SEC stated.
"Investors should consider the volatility of bitcoin and the bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying bitcoin market," SEC experts said, stressing that the statement had no legal force or effect.
However, such announcements are likely to become more than just a recommendation in the future. SEC Chairman Gary Gensler addressed Congress, proposing to develop a regulatory framework in order to control the cryptocurrency industry.
