UBS, one of the world’s top banks, has issued a warning to investors about Bitcoin, suggesting that the cryptocurrency bubble will burst soon as a result of regulatory action.
The bank believes that what is happening in China provides the finest insight into the future of crypto, and that the United States and the United Kingdom will follow following.
One of the world’s major banks has issued a warning to investors about Bitcoin and other cryptocurrencies. UBS, Switzerland’s largest bank, predicts that the Bitcoin bubble will burst shortly. It cited China’s crackdown on miners and crypto as a clear warning that their role in the economy is always in jeopardy, and that investors might lose all of their money if officials keep cracking down. Despite the bank’s exploration of Bitcoin products for its rich clients, the warning comes.
UBS recognized the crackdown in China as one of the main concerns to Bitcoin’s future in a report to investors. The Asian country has cracked down on bitcoin miners, resulting in the largest mining difficulty change in the cryptocurrency’s history.
Furthermore, as we previously noted, China has started tightening down on cryptocurrency. The country’s central bank has issued a warning to banks about processing cryptocurrency payments. China has ordered that all crypto-related accounts be closed by major financial institutions.
While China may be leading the way, UBS predicts that other Western countries will follow suit soon. The United States and the United Kingdom, according to the bank, are the next two countries likely to crack down on the business.
Regulators have shown that they can and will take action against cryptocurrency. As a result, we advise investors to steer clear of riskier assets and build their portfolio around less risky assets. We’ve been warning for a long time that changing investor sentiment or regulatory crackdowns might deflate crypto markets.
UBS: Cryptocurrencies are speculative, and they pose a risk to investors.
Even skilled investors, according to the Swiss bank, are too dangerous in the crypto market. It’s still too dangerous, despite the promise of bigger returns than most traditional capital markets, according to the note.
While future price advances in cryptos cannot be ruled out, we consider this as a speculative market with high dangers for experienced investors.
UBS went after more than simply the risk that cryptos entail. Some of the industry’s actions, according to the bank, are in violation of basic capital market norms.
Extending 50X or 100X leverage, for example, appears to be fundamentally at odds with mainstream banking regulation.
Despite all of the drawbacks of cryptocurrency, UBS is looking into Bitcoin for its high-net-worth clients. The bank has noticed an increase in demand for Bitcoin from its customers, as we previously reported. UBS, a Swiss banking powerhouse, is looking into cryptocurrency investment for high-net-worth individuals.
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