Buying Bitcoin: A High-Risk Proposition
The Financial Conduct Authority (FCA) has issued regular warnings about the high-risk nature of cryptocurrencies such as Bitcoin. Cryptocurrencies lack intrinsic value and are not protected by regulatory schemes, so investors should be prepared to lose all their money.
How to Buy Bitcoin in the UK
UK investors looking to buy Bitcoin can either use a trusted exchange or broker and add funds to their account, place an order, and ensure they have a safe storage option to prevent theft or hacking. Alternatively, investors can gain indirect exposure to Bitcoins through investing in cryptocurrency-connected businesses or crypto exchange-traded funds.
Understanding Bitcoin’s Volatility: A Risky Investment
In recent years, Bitcoin has hit record-high prices and experienced extreme volatility, making it inherently risky. Its value is determined by supply and demand, and losing trust in its use as a means of payment could lead to a plummet in its value. In May 2021, Elon Musk’s announcement that Tesla would stop accepting Bitcoin led to a 17% drop in its price.
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