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Cryptoassets – opportunity or risk?

Sponsored feature | Michael Bretherick, chartered financial planner, Gibbs Denley Financial Services

Michael Bretherick, Gibbs Denley Financial Services
Michael Bretherick, Gibbs Denley Financial Services

According to the Financial Conduct Authority (FCA), 2.3 million adults now hold cryptoassets, compared to 1.9 million last year. Awareness has also increased, with almost eight in 10 adults having heard of cryptoassets.

While the popularity of cryptoassets among UK investors is therefore increasing, many financial regulators and institutions have concerns as to whether investors fully appreciate the potential risks involved with these assets.

The rise in the value of bitcoin over the last decade has been well documented, but it’s important to note that it has experienced periods of considerable volatility and some investors have lost money. Cryptoassets in general are considered very high-risk, speculative investments, and as a result they will almost certainly not be suitable for the majority of investors.

Furthermore, as these products are largely unregulated, if something goes wrong, investors are unlikely to have access to the Financial Services Compensation Scheme or Financial Ombudsman Service.

If you’re thinking about investing in cryptoassets you should therefore keep in mind:

  • Cryptoassets are high risk, and you could lose all your money
  • The performance of cryptoassets is volatile
  • Most crypto exchanges and assets are not regulated, so you aren’t protected.
  • Converting cryptoassets back into cash can be difficult and will depend on market conditions.
  • Fraudsters use a lack of awareness about cryptocurrency in scams, so be cautious of guaranteed or high returns, or time-sensitive offers.

Contact our team to find out more about how we could help you. Call 01954 233650 or email financial@gibbsdenley.co.uk.

Please note that Gibbs Denley do not invest in, or advise on, any cryptoassets. This article is for general information only and does not constitute advice. The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

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