UBS Advises ‘Stay Clear’ of Cryptocurrencies — Warns ‘Regulators Will Crack Down on Crypto’ – Regulation Bitcoin News

Switzerland’s largest financial institution, UBS, has suggested traders to “keep clear” of cryptocurrencies and “construct their portfolio round much less dangerous property.” The UBS analysts warned that “Regulators have demonstrated they will and can crack down on crypto.”

UBS’ Crypto Advice and Warning

The international wealth administration group at UBS warned in a word revealed final week that regulators worldwide, notably the U.S. and the U.Okay., will impose harder cryptocurrency laws. Citing that “China’s newest crackdown — extending to miners, banks, e-payment networks, and social media — damage crypto costs and operators,” the UBS analysts wrote:

Regulators have demonstrated they will and can crack down on crypto … So we recommend traders keep clear, and construct their portfolio round much less dangerous property.

“We’ve lengthy warned that shifting investor sentiment or regulatory crackdowns might pop bubble-like crypto markets,” the analysts added. “We suppose traders ought to keep away from crypto hypothesis, and contemplate risk-adjusted returns earlier than shopping for various property.”

The financial institution identified {that a} quantity of regulators worldwide have begun tightening their oversight of the crypto market. Recently, China has been cracking down on bitcoin mining and funds. Canada’s regulator has despatched notices to crypto exchanges and the regulators in Japan, the U.Okay., Cayman Islands, and Thailand have focused international crypto alternate Binance.

The U.Okay. has imposed tight registration necessities on crypto exchanges, inflicting 64 corporations to withdraw their functions to register. In South Korea, most small exchanges are in danger of having to close down operations resulting from strict regulatory and banking necessities.

The UBS analysts additional described: “Crypto buying and selling practices, resembling extending 50x or 100x leverage, seem essentially at odds with mainstream finance regulation.” They warned:

While we are able to’t rule out future worth features in cryptos, we see this as a speculative market that poses vital dangers to skilled traders.

The financial institution, nevertheless, reportedly acknowledges that some shoppers need publicity to cryptocurrency, notably bitcoin, and is rumored to be contemplating providing crypto companies to rich shoppers. A rising quantity of funding banks are already doing so, together with Goldman Sachs, Morgan Stanley, Citigroup, Standard Chartered, and DBS.

What do you consider UBS’ crypto recommendation and warning? Let us know within the feedback part beneath.

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