Securities regulators speak out, expert calls for crash
Trading in cryptocurrency futures contracts and other products related to digital currencies comes with inherent risks and investors should be aware.
That’s the key message from the Canadian Securities Administrators which issued a warning Monday following the second-in-as-many-weeks frenzy of trading in futures contracts.
The launch of CME’s bitcoin futures trading prompted the CSA to highlight the high level of risk such investments bring and that they are not suitable for all investors.
“More specifically, the underlying value of these futures contracts is based on trading occurring on markets for cryptocurrencies which are largely unregulated,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
“Therefore, there may be some circumstances such as price volatility in the underlying markets, which may lead to consequences such as sudden and significant margin calls in the futures market.”
The CSA is also urging investors to understand all the risks involved and says that traders and advisors must do due diligence on cryptocurrency-linked products before recommending them to clients.
It says that although products such as futures contracts may be traded on regulated exchanges, this does not remove the need for caution.
It’s going to crash says cryptos investor
While the price continues to rise for bitcoin, an investor and academic at the London School of Economics says that it’s a bubble and there will be a crash.
Oliver Issacs says that he believes that the long-term future for digital currencies is positive and that it will transform many areas of finance. But that’s once regulation takes hold.
For now, Isaacs is ready for a sharp correction and is warning investors about jumping on the bandwagon.
“I don’t want people to walk through what is going to be the bloodiest financial danger of the 21st century," he told Express.co.uk.
That’s the key message from the Canadian Securities Administrators which issued a warning Monday following the second-in-as-many-weeks frenzy of trading in futures contracts.
The launch of CME’s bitcoin futures trading prompted the CSA to highlight the high level of risk such investments bring and that they are not suitable for all investors.
“More specifically, the underlying value of these futures contracts is based on trading occurring on markets for cryptocurrencies which are largely unregulated,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.
“Therefore, there may be some circumstances such as price volatility in the underlying markets, which may lead to consequences such as sudden and significant margin calls in the futures market.”
The CSA is also urging investors to understand all the risks involved and says that traders and advisors must do due diligence on cryptocurrency-linked products before recommending them to clients.
It says that although products such as futures contracts may be traded on regulated exchanges, this does not remove the need for caution.
It’s going to crash says cryptos investor
While the price continues to rise for bitcoin, an investor and academic at the London School of Economics says that it’s a bubble and there will be a crash.
Oliver Issacs says that he believes that the long-term future for digital currencies is positive and that it will transform many areas of finance. But that’s once regulation takes hold.
For now, Isaacs is ready for a sharp correction and is warning investors about jumping on the bandwagon.
“I don’t want people to walk through what is going to be the bloodiest financial danger of the 21st century," he told Express.co.uk.
