The strategists at one of the world's largest asset managers are giving warnings to new investors plunging into crypto's record rally: You could still lose all your money.
According to UBS Global Wealth Management, amid regulatory threats and central-bank-issued competitors, in the end, there's nothing stopping the big-name digital wiping out.
As a large chunk of Wall Street investors jumped into Bitcoin's rally, the Swiss-based company said prices could rise in the near term, but the industry faces remaining risks. in the long run
Authors including Michael Bolliger, chief investment officer for global emerging markets said in a report Thursday (Jan. 14): “In our opinion, there is very little possibility. prevent crypto prices from falling to zero when a better designed version is released or if regulatory changes discourage sentiment. Netscape and Myspace are examples of widespread networking applications that eventually went away, ”the strategists wrote in response to growing customer interest.
With Bitcoin falling back to $ 37,000 from a previous high of $ 42,000, the notoriously volatile asset class is causing controversy among the world's biggest money regulators. While prominent investors including Paul Tudor Jones and Stan Druckenmiller are entering the industry, critics argue that cryptocurrencies are just gambling, scandal, and manipulation.
In the short term, the price of cryptocurrencies may rise new thanks to market dynamics, large institutional adoption and limited supply. But in the long run, the market is at risk of regulatory interference, strategists said. Also cites the UK's decision to ban the sale of certain crypto derivative products to retail investors.
Like most other companies, UBS Wealth is skeptical of the real-world utility of virtual tokens, but don't be in a hurry to call the price of cryptocurrencies a bubble, given it's difficult to determine fair value for an asset. have cash flow.
Other investors have set ambitious price targets on Bitcoin, saying that it will continue to rise as more institutional investors sell their holdings of gold in favor of digital currencies to diversify. investment portfolio. Guggenheim Investments' Scott Minerd said Bitcoin could be worth around $ 400,000, while JPMorgan strategists see a price target of $ 146,000 in the long run.
“Investors in cryptocurrencies have to limit the size of their investments to a level they can afford to lose,” UBS Wealth said.
The authors also forget that a lot of coins are under the control of the government, backed by the government, but with their own weakness, those "banknotes" are cheaper than plain paper, like Venezuela. or Zimbabwe for example.