By Alicia Maher
EU regulators (in the banking, securities, and insurance sectors) have issued a joint warning to potential crypto investors to make proper findings before investing in any crypto-related scheme. According to the warning notice released on March 17, investors stand a higher chance of losing their money than making any gains from most supposed crypto investments.
Highlights From The Joint EU Regulators’ Statement
Part of the joint notice stated that investors must realize that no regulations protect them if their investments turn south regardless of what any crypto ad says. “Consumers buying crypto assets need to be aware that they can lose everything and can’t take any legal action against the fraudsters,” the EU statement further explained.
The EU regulators also discussed the environmental effect of pow blockchains following persistent calls over the matter. Hence, part of the highlight from the joint statement touched on this aspect. The regulators agree that crypto mining on PoW networks (mainly BTC and ETH) consumes enormous energy.
Since both accounts for nearly 65% of the entire crypto market, it is necessary to send them warning notices to either switch to a PoS network or find alternative energy supply means.
Based on the percentage above, altcoins account for about $761B of the entire crypto market cap, which currently stands at over $2 trillion. Thus, showing the colossal degradation the mining of BTC and ETH can cause to the environment. However, it did acknowledge Ethereum’s plans to switch to a PoS via the beacon chain.
A Bear Market Is Likely – Crypto Analysts
Part of the statement advised crypto investors to do adequate research before making any crypto-related investment and not depend on what they see in crypto ads. The statement further said, “most of the claims in these ads are fake, especially earnings returns or video testimonials from prominent figures in the society.”
Most crypto analysts predict a bear crypto market occurrence until at least the next BTC halving. Crypto trader with Twitter username, AltcoinGordon, even claimed that BTC might likely trade at $10K before making any sustainable bullish move. Gordon further said, “Most of my billionaire friends have indicated zero interest in buying BTC at its current price. While this doesn’t connote any price prediction clues, it makes for an exciting observation.”
The BTC Fear and Greed index lends credence to Gordon’s assertions. The BTC fear & greed index has been in the extreme fear region for some weeks now. Thus, indicating that the bears continue to dominate the BTC market.
Unrealistic Gains And Devious Creativity
The high volatility of the crypto market means that investors can make huge profits or losses. Hence, crypto analysts usually warn investors to stay off crypto investments or projects offering unrealistic gains. Most of such crypto investments or projects are scams in disguise.
At this time, the high volatility of the crypto market isn’t as worrisome as the high level of crypto scams prevalent in the crypto industry. Crypto scammers have become more creative (negatively) with their ads to lure in unsuspecting investors.
Australia’s top regulator (ACCC)’s lawsuit against Facebook (Meta) is a recent example. While the regulator claims that Meta conspired with the crypto scam advertisers, meta claims the scammers used devious means to escape its scam ad filtering mechanisms.