Yes, you did read it correctly. It does say 504 per cent per year. That's how much Bitcoin grew in value. See how you could benefit below.
If You’d Bought $100 Of Bitcoins On 1 September 2010, Seven Years Later On 1 September 2017, You Could Have Cashed Out For $8,251,200
Bitcoin Could Have Earned You A Compound Interest Rate Return Of 504 Per Cent Per Year For Each Of The Last Seven Years
That’s somewhat higher than the 1 per cent per year you might earn if you deposit your money in a bank or building society.
But don’t be fooled - these are definitely not the same sort of investments.
A bank deposit is guaranteed by the Financial Services Compensation Scheme, at least up to the first £85,000 per institution.
Bitcoin, by contrast, is a very high risk speculative investment. It carries no such guarantee.
One of the main risks is price volatility. This is perfectly illustrated by the fact that Bitcoin has either been the best or the worst performing currency in each of the last four years, with nothing to be found in between.
Bitcoin Is Growing In Popularity
Recent research shows there are currently between 2.9 million and 5.8 million people around the world using a crypto-currency like Bitcoin.
Bitcoin is now accepted in many places, including large international businesses like Starbucks. And whilst that appears to provide Bitcoin with an air of mainstream respectability, it’s quite rightly caught the attention of the regulator.
In September 2017, the Financial Conduct Authority released a stern warning about investing in Initial Coin Offerings (ICO). An Initial Coin Offering raises money for a specific project or company through the issue of a physical coin in exchange for a crypto-currency, such as Bitcoin.
In addition to highlighting six key risks, the regulator says:
You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g. business plan, technology, people involved) and prepared to lose your entire stake.
Here’s the full Bitcoin warning.
The UK financial services watchdog is not alone.
China has banned Initial Coin Offerings, saying it was necessary to stop illegal fundraising and pyramid schemes.
The US Securities and Exchange Commission issued an “investor alert” in July 2017 to make investors aware of the potential risks. In August 2017, regulators in Singapore and Canada also cautioned investors about the sector.
How To Get Exposure To Bitcoin And Other Crypto-Currencies
eToro offers a passive, diversified crypto-currency CopyFund in Bitcoin and the other major crypto-currencies. The company was established in 2007 has about 6 million users in 170 countries.
So if you fancy a punt, click the image below. But please heed this warning ...
Whilst eToro may be regulated by the Financial Conduct Authority, only do this if you're prepared to lose your entire stake (the words of the regulator, as you can see above).
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