The Financial Conduct Authority (FCA), has said that it will ban the sale of Bitcoin-based products for the retail investors. The reason behind it is that most of the people lose their money on digital assets like Bitcoin. According to the announcement, this ban will come into effect from January 06, 2021. It has been seen that after this announcement by the FCA, shares of several online trading platforms fell by 2 to 3 percent.
FCA Believes There is Huge Risk to Invest in Such Products
The main concern of the FCA is to prevent people from facing huge losses due to investing in products like this. The watchdog has already sent out the proposals for the ban in 2019. Now during the time of the announcement, it believes will save 53 million pounds of the retail investors.
According to the watchdog, this market is full of financial crime and huge volatility due to which it becomes extremely risky for people to invest in such products. Sheldon Mills, Executive Director at FCA has said, “Significant price volatility, combined with the inherent difficulties of valuing crypto assets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives.”
These Products are Popular in Young Male Investors
FCA has claimed that all these products are highly popular among young male investors. This is the reason why most of the people in public consultation have opposed this ban. The investors have claimed that Bitcoin is having an intrinsic value and a lot of companies like Microsoft and Starbucks are accepting Bitcoin as a payment method. However, the watchdog is still very particular about this ban and maintaining a firm stand over it.