Benefit of $294 MillionApart from just cryptocurrencies, the proposed ban on financial instruments linked to digital assets takes into account complex investment assets such as contracts for difference (CFDs), options and futures, and exchange-traded notes. According to the FCA, banning the trade and exchange of such investment products may benefit the consumers by as much as $94 million to $294 million per year. The executive director of strategy and competition at the FCA, Christopher Woolard, specifically noted that investors face difficulties in recognizing the value of derivatives based on volatile and unregulated crypto assets. Explaining the decision of the FCA, he also pointed towards cryptocurrency-related crimes that have so far caused a loss of over $1.2 billion in 2019.
95 Percent of Forex Traders Lose MoneyThe fact about 90 to 95 percent of forex traders losing money in the market is quite well-known throughout the investment sector. Forex investment has been around for far longer than cryptocurrencies and other investment products revolving around it. Despite that, and the fact that forex markets aren’t as volatile as the cryptocurrency markets, most of the forex traders never gain a penny from investing in it. The effect of this was clearly visible when China banned banks from forex margin trading services in 2008. But most countries never budged to that. While there are no reliable statistics that define what percentage of cryptocurrency traders make or lose money in the market, it’s quite unreasonable to ban the trade and exchange of cryptocurrencies. Investment markets, irrespective of what category they are, always have those who make money and those who lose it. And the latter often reflects the majority of the market. What are your thoughts on FCA’s proposal to ban cryptocurrencies? Do you think that such actions are only coming through due to the excess hype that cryptocurrencies have created? Let us know your thoughts in the comments below.
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