Bitcoin traders have been warned against investing in the virtual currency after a huge drop in value over the weekend.
The value of Bitcoin had reached a record high over the weekend, but prices dropped by around 12% on Monday.
The UK’s Financial Conduct Authority (FCA), said Monday that investing in crypto assets “involves taking very high risks with investors’ money”.
“If consumers invest in these types of product, they should be prepared to lose all their money,” it warned.
Bitcoin has been rallying since October 2020 with prices soaring by a staggering 300%.
Prices reached a record high of around $41,000 on 8 January but has since gone down to around $35,000.
Analysts had warned about an impending correction.
On Monday, the cryptocurrency market’s capitalisation fell from about $1.1trillion to about $978.22billion, according to CoinMarketCap data.
Up to $170billion was wiped from the cryptocurrency market’s value in just 24 hours.
All three leading cryptocurrencies – bitcoin, ethereum and tether – went down in value over the past 24 hours.
In 2018, then Prime Minister Joseph Muscat had told the United Nations General Assembly that cryptocurrency was the “future of money.”
He had spoken about Malta’s move to set up as a “Blockchain Island” and said that the nation was the “first jurisdiction worldwide” to regulate the technology that “previously existed in a legal vacuum.”
“Blockchain makes cryptocurrencies the inevitable future of money, more transparent since it helps filter good businesses from bad businesses,” Muscat had said.
But Malta’s Blockchain dream seems to be fading away fast, with Finance Minister Clyde Caruana recently saying that ‘Blockchain Island’ cannot happen unless traditional banks jump on board.
He told LovinMalta that, “Traditional banks have written off blockchain at its early stages. There’s always the potential [for Blockchain Island] but if we want to make it happen, there must be more work. The banks must be convinced that this is something that can really happen; unless they’re on board it will be very difficult to go for that.”