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UK’s financial watchdog issues warning against bitcoin

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People investing in cryptocurrencies could possibly lose their money, the Financial Conduct Authority warned

People who invest in cryptocurrencies such as bitcoin could lose all their money, the UK financial watchdog said in a statement. Britain’s Financial Conduct Authority said in a statement: “If consumers invest in these types of product, they should be prepared to lose all their money.”

Recently, bitcoin, the most popular cryptocurrency to date, has caught everyone’s attention as its value increased over 300 percent during the last one year. But cryptocurrencies are highly volatile in nature. Bitcoin’s value also dropped by about 15 percent from a record high of about $41,800 to $34,645.

US-based multinational investment bank JP Morgan has made a bold prediction when it comes to bitcoin. According to the bank, bitcoin prices will hit $146,000 in the long term.

Comparing Bitcoin to traditional store of value assets such as gold, lead analyst Nikolaos Panigirtzoglou suggested that Bitcoin’s current market capitalisation of around $580 billion would have to rise by 4.6 times which would create a theoretical price of $146,000.

In a note, Nikolaos wrote, “A crowding out of gold as an ‘alternative’ currency implies a big upside for Bitcoin over the long term. A convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process. This implies that the above $146,000 theoretical Bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”

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