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On Thursday night, the chief executive of the Financial Conduct Authority (FCA) has issued a firm warning regarding bitcoin, the cryptocurrency.
Talking on the Newsnight of BBC, Andrew Bailey stated: “If you want to invest in bitcoin, be prepared to lose all your money.”
He remarked that the FCA did not regulate bitcoin, only the financial instruments that it refers to, as it is technically a commodity instead of a fiat currency that is backed by a central bank.
However, despite raising concerns regarding the lack of transparency and pricing volatility of the cryptocurrency, Bailey stated: “I don’t think bitcoin is prevalent enough to be a systemic threat.”
The interview with Bailey happened after the Chicago Board Options Exchange (CBOE) permitted the trading of bitcoin futures this week.
The chief executive of CBOE, Ed Tilly, informed the BBC: “We’re not endorsing bitcoin, but what we wanted to do was bring transparency to an industry where there was interest.”
The cryptocurrency’s price, which is based on blockchain technology that is allowing its ownership to stay completely anonymous, has soared by over 1,000 percent this year.
However, experts have expressed concerns over the fact that there are only a finite number of bitcoins to be “mined,” and that the coins are not in any way connected to any form of tangible commodity.