UBS Chairman Axel Weber has advised not to invest in bitcoin as it fell 12% in the last 24 hours. On the other hand, South Korea has put a ban on anonymous trading.
Axel Weber used the platform of Davos world economic forum to state that it’s “not an investment we would advise” as Bitcoin with other Cryptocurrencies are in a fairly risky state. He added that
“Retail clients, who don’t fully understand these products, should be protected from going into these products because if there is a retail client affected in the future, the question will be again who was the bank that sold them these products and then banks will be blamed again for what has happened”
His comment can be inspired by Warren Buffet who denied his intentions of investing in cryptocurrencies. The billionaire investor did not seem interested in the new bubble of online trading even after a 2000% rise of bitcoin in 2017.
The consultancy (Ernst & Young) has already warned investors about cybercrimes in ICO Offerings. According to their study 372, ICO’s of $3.7 billion was stolen by hackers which amounted to $400m. They were making $1.5m a month from ICO proceeds.
Bitcoin has seen a fall in its value in December after various government statements. It further took a dive of 12% valuing around $10,400 on Tuesday. The downfall started after South Korean Government finally put a speculated ban on cryptocurrency trading through anonymous bank account from 30th January. This step is making a huge impact on bitcoin as it’s the third largest market for cryptocurrency trading.
South Korean government is focused on stopping money laundering through online currency trading. For now, it wants to stop people from using bank accounts without residing in the country while preventing minors (less than 19) from trading in cryptocurrency.
After the declaration, one local investor stated “everyone knew this was coming, as the government already said they will enforce the real-name system before. “Rather, I can see this as a chance to go in, not out. I don’t see any reason to take my money out”
SEC after companies which change business model
SEC has stated that it would not allow companies to alter their business model or name to cash in the blockchain technology. On Monday, Jay Clayton said “The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering,”
In a recent research report, Capital Economics has warned that cryptocurrency will see its demise in near future before another price rise. According to this report government regulations and hacking will lead to cryptocurrencies bubble getting burst.
Still, these are mere speculations as anything is possible like the meteoric rise of bitcoin last year. Investors have earned millions from it and they will try hard to make their gold mine survive.