Key points
- S&P/ASX 200 Index (ASX: XJO) down 4.8% in 2022
- Bitcoin (CRYPTO: BTC) down 14.4% in 2022
- Ethereum (CRYPTO: ETH) down 20.1% in 2022
- Don’t put all your eggs in 1 basket!
Crypto investor take heed.
While investing in crypto assets like Bitcoin and Ethereum can deliver some outsized returns, those gains are far from guaranteed.
Indeed, after hitting record highs in November last year, the world’s top 2 cryptos by market cap are deep in the red so far in 2022.
Bitcoin is currently trading for US$40,976 (AU$56,926). That’s down 2.1% over the past 24 hours and down 14.4% for the day, according to data from CoinMarketCap.
Ethereum is faring even worse. The number 2 crypto is down 3% since this time yesterday and has lost 20.1% since 1 January.
Which brings us to this word of warning from Australian Securities and Investments Commission (ASIC) chairman, Joseph Longo.
Crypto investors take heed
With more than 2 million Aussies already having invested in cryptos, Longo is cautioning investors they could lose some or all of their investment due to scams or other misconduct in the industry.
As the Australian Financial Review reports, Longo said, “I’m worried about consumer harm and the number of people in Australia exposed to crypto.”
Longo continued:
We know from anecdotal and factual evidence between us and the ACCC, there is definitely an uptick in the number of scams and misconduct leading to people losing money by attempting to invest in cryptocurrencies and assets.
My personal warning to people is to be careful and don’t put all your money into crypto.
Limited intervention powers
Unlike its broad powers to regulate the share market, ASIC has far less oversight over the crypto world. That’s because the decentalised nature of cryptocurrencies means they aren’t officially financial products and so aren’t subject to the Corporations Act.
Addressing the potential risk of investing in crypto or other high-risk assets, Longo advised investors to be well informed:
This whole issue of financial literacy is a significant issue. We still have too many people who are making poor decisions around their finances. If you’re putting a big proportion of your wealth into a single investment, you really need to be careful.
The post Investing in crypto? ASIC chairman sounds warning appeared first on The Motley Fool Australia.
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More reading
- Can Ethereum reach $5,000?
- Is Ethereum losing steam in 2022?
- Bitcoin (CRYPTO:BTC) takes most popular crown, here are 3 cryptos hot on its heels
- This under-the-radar cryptocurrency stock could outpace Bitcoin in 2022
- Crypto is crashing: Should you invest now?
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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