UK’s Watchdog says Cryptos have “No Intrinsic Value,” eToro Analyst Counters, What About “Massively Depreciating” Pound
- FCA is at it yet again!
- But what about Pound that’s dropping like “a hot potato”
- Fiat is all about, “Keep calm & stay bearish”
UK’s Financial Conduct Authority (FCA), the financial regulatory body of the country is at it again as it warns people to be cautious about putting their money into cryptocurrencies like Bitcoin that have “no intrinsic value.”
“This will allow firms to have a better understanding of whether they need to be authorized and what they need to do to ensure they are compliant,”
the watchdog said in a statement on Wednesday.
Regulators around the world are still trying to understand how to regulate digital currencies, though they are coming to an important realization that whatever they do they can’t ban bitcoin.
FCA Is At It YEt Again!
The FCA’s guidance is a milestone in regulating the cryptocurrency sector that in its consultation paper in January said tokens like Bitcoin, Ethereum, and Litecoin doesn’t fall under existing rules, as such does not require authorization from the regulator.
“Consumers should be cautious when investing in such crypto-assets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value,”
the FCA said.
Firms that offer the security tokens that provide rights, however, must seek authorization, according to FCA.
But What About Pound That’s Dropping Like “A Hot Potato”
In response to FCA’s stale “no intrinsic value” remarks for crypto-assets, Mati Greenspan, senior analyst at eToro asked the regulator,
“Please tell me Mr. Watchdog…Who will protect UK citizens against the massive depreciation of the British Pound? GBPUSD is down 30% in the last 5 years. Do you have any consumer protections for that!?!”
The British pound has slipped closer to its lowest sustained level against the greenback in over 34 years on the back of rising fear among investors regarding economic disruption if the UK quits EU without a deal.
Prime Minister Boris Johnson has vowed to have the Brexit by the end of October, with or without a deal.
“The pound has dropped like a hot potato, as the likelihood of a no-deal Brexit becomes increasingly plausible,”
said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
Fiat Is All About, “Keep Calm & Stay Bearish”
The fear is finally setting in and it just might be the starting as,
“There is now a very real chance that the pound will fall to $1.20 and even below,”
said analyst Neil Wilson of Markets.com.
Brits traveling abroad have already started to pay the price but some Brexit supporters argue that a weaker pound will be good for the economy as it will boost tourism.
But weaker pound can cause inflation to spike as imports become more expensive. This would hurt consumers more quickly than wages. A collapsing currency could also frighten away foreign investors.
For now, Emmanuel Ng, an analyst with OCBC in Singapore says just
“Keep calm & stay bearish.”