Bitcoin Price Suddenly Plunges 20% – Wiping Out $ 10,000 From A Single Coin’s Value | Economic news

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Bitcoin plunged more than 20% over the weekend, wiping out more than $ 10,000 (£ 7,395) from the price of a single coin.

The fall puts the cryptocurrency on track for its biggest single-day drop since March, when the COVID-19 pandemic was just beginning to destroy global markets.

Bitcoin fell as low as $ 30,500 on Monday afternoon – its lowest point since Jan.5 – after hitting a record high of $ 42,000 on Friday.

The crash prompted the UK’s Financial Conduct Authority to warn that those who invest in cryptocurrencies should be prepared to lose all of their money.

In a statement, the FCA said crypto investments generally involve very high risks – and some investment firms may underestimate those dangers while overstating the potential returns.

UK consumers have also been told that they are unlikely to have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if something goes wrong.

Laith Khalaf, financial analyst at AJ Bell, said: “The regulator is clearly concerned that the high risks already inherent in cryptoassets are being compounded by scam activity, as well as unregulated companies targeting consumers with marketing material that highlights the pros, but not the potential downside, of investing in crypto assets.

“You can see how the rapid appreciation in the price of Bitcoin, combined with aggressive marketing and low interest rates on cash, is creating a perfect storm for consumers looking to get a decent return on their money.

“Unfortunately, Bitcoin and other crypto-assets are subject to dramatic price drops and increases. Consumers should be alert for unsolicited communications related to Bitcoin or other cryptocurrencies and should view any marketing material with an extremely critical eye.

“They should also make sure that any company they deal with is regulated, or at least has temporary authorizations from the regulator. ”

Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown, said: “There is a lot of speculation that bitcoin will become more mainstream, especially with the involvement of more institutional investors, but the future of crypto-currencies remains very uncertain.

“Bitcoin’s price is primarily determined by future price speculation rather than an underlying use case. The Financial Conduct Authority clearly believes the crypto Wild West could spiral out of control and warns that consumers risk losing all their money if they succumb to the promises. fast and high returns. ”

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