The German bank Deutsche Bank does not advise investing in cryptocurrency, Markus Müller, head of the investment department of the private wealth management department of Deutsche Bank AG, said in an interview with Bloomberg. Risks include high volatility, possible price manipulation and loss or theft of data.
"We do not recommend investing in this way. This is the prerogative of those who invest speculatively. There is a real risk of losing all funds invested." According to Mr. Muller, the recent price increase is far-fetched, given the current market situation.
Deutsche Bank is not alone in warning about the risks associated with cryptocurrency. The head of the Central Bank of Spain, Luis Maria Linde, also believes that the crypto business poses various risks. In addition, the Austrian Financial Planning Association compared investing in bitcoin to “going to a casino.”
Mr. Müller believes that in order for cryptocurrency to become a new asset class, it is necessary to ensure proper regulation, security and transparency of transactions with it, for example through official trading platforms. "It is unclear how liability and paperwork will be regulated. We are still at the very beginning."
The value of Bitcoin has fluctuated significantly over the past few weeks. In one day there was a decrease of more than 20 percent. Among other things, it is believed that the decline is due to a crackdown by Asian regulators.
Japan's financial regulator is not in a hurry to follow the US and allows the listing of futures contracts linked to cryptocurrency.
According to Mr. Mueller, companies issuing cryptocurrency should cooperate with regulators. “Once security is achieved and trust is established, cryptocurrency can be seen as a new asset class. Perhaps within five to ten years, the necessary regulation will be developed.”
Mr Mueller does not understand why so many cryptocurrency supporters see something negative in regulation, because it, on the contrary, protects against violations and crimes. He also noted that traditional money is supported by the economic power of the country. At the same time, according to him, gold is an even more abstract collateral for fiat currencies, but at least has a physical nature. On the other hand, cryptocurrency will only function as a store of value if the issuing companies have a sustainable business model.
However, interest in the underlying technology, blockchain, is growing rapidly, noted Markus Müller.. "Cryptocurrency makes transactions simple and low-cost. There is the potential to completely transform some industries."
According to https://www.bloomberg.com
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