Experts echo RBI sentiments of high risk amid Bitcoin rally
With high demand driving the prices of Bitcoin to record heights worldwide, cryptocurrency experts and the Reserve Bank of India have reiterated concerns involved in the investment in highly volatile market of Bitcoins.
New Delhi : With high demand driving the prices of Bitcoin to record heights worldwide, cryptocurrency experts and the Reserve Bank of India have reiterated concerns involved in the investment in highly volatile market of Bitcoins.
"It is a high risk investment. If you do not have adequate information and knowledge about internet and bitcoins it is quite risky and amounts to harming oneself. If the worth of this currency can rise 10-15 times in a year, there is also a possibility that it can come down by 15-20 times in a night," said crypto currency expert, Subhransh Rai.
For the first time on Thursday, Bitcoin surpassed USD 15,000 which shows fuelling investor interest ahead of the launch of Bitcoin futures on Chicago-based CBOE on Sunday.
Rai said that Bitcoin demand has risen worldwide and when something is in limited quantity and in high demand, prices are bound to rise.
" The Indian government, RBI is not considering it as a currency or even a commodity. It is advisable to the general public not to invest their hard earned money in the highly volatile market of bitcoins," he added.
Earlier on Tuesday, the Reserve Bank of India (RBI) called on those trading in Bitcoins and other virtual currencies regarding the risks involved in the same.
The central bank in an official release cautioned users, holders and traders of Virtual Currencies (VCs) including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs.
The RBI had also clarified that it has not given any licence or authorisation to any entity or company to operate schemes or deal with Bitcoin or any other VC.
Bitcoin is a virtual currency that emerged in the aftermath of the financial crisis and allows people to bypass banks and traditional payment processes to pay for goods and services.
However, banks and other financial institutions have been concerned about the early associations of the currency with money laundering and online crime, and it has not been adopted by any government so far.