Bitcoin traders have been warned against investing in virtual currency after a huge drop in value over the weekend.
Bitcoin’s value hit an all-time high over the weekend, but prices fell about 12% on Monday.
The UK’s Financial Conduct Authority (FCA) said on Monday that investing in crypto assets “involves taking very high risks with investors’ money.”
“If consumers invest in these types of products, they should be prepared to lose all of their money,” he warned.
Bitcoin has rallied since October 2020 with a 300% price spike.
Prices hit a record high of around $ 41,000 on January 8, but have since fallen back to around $ 35,000.
Analysts had warned of an imminent correction.
On Monday, the cryptocurrency market capitalization fell from around $ 1.1 trillion to around $ 978.22 billion, according to data from CoinMarketCap.
Up to $ 170 billion was erased from the value of the cryptocurrency market in just 24 hours.
The three major cryptocurrencies – bitcoin, ethereum, and tether – have lost value in the past 24 hours.
In 2018, then Prime Minister Joseph Muscat told the United Nations General Assembly that cryptocurrency was “the future of money.”
He had spoken of Malta’s decision to become a ‘blockchain island’ and said the nation was the ‘first jurisdiction in the world’ to regulate technology that ‘previously existed in a legal limbo’.
“The blockchain makes cryptocurrencies the inevitable future of money, more transparent because it helps filter good companies from bad,” Muscat said.
But the dream of Blockchain in Malta seems to be fading quickly, with Finance Minister Clyde Caruana recently declaring that ‘Blockchain Island’ can only come true if traditional banks embark on the adventure.
He told LovinMalta that “traditional banks deregistered blockchain in its infancy. There is always potential [for Blockchain Island] but if we are to get there, there has to be more work. Banks have to be convinced that this is something that can really happen; unless they are on board, it will be very difficult to get there.