More and more consumers are interested in investing in virtual currencies, partly because of the spectacular returns. Virtual currency (also called cryptocurrency) can be described as a means of payment that is not checked and has not been issued or guaranteed by a central bank. Bitcoin and Ethereum are well-known examples, but there are also hundreds of different virtual currencies.
A financial bubble?
Due to the recent increase in popularity and the explosive price increases, these currencies show similarities with a financial bubble. With a bubble, prices can go up for a long time, but a small event, such as a negative news report, can suddenly burst. Realize that prices can collapse unexpectedly and quickly.
In addition to the risk of forming a bubble, the AFM also points out other risks when investing in virtual currencies:
- Virtual currencies are currently outside the control of the AFM and DNB
- The rates of virtual currencies can fluctuate tens or even hundreds of percent per day.
- Moreover, there is a real risk that the value of a virtual currency can fall permanently to zero and you will lose your money
- Virtual currencies are vulnerable to cyber crime.
- It is possible that others will gain access to your wallet through a hack, which may cause you to lose your virtual currency
- If you lose your digital wallet’s password, it will no longer be accessible in any way.
- This means that you have lost your investment for good
- Many virtual currencies have little trade. This makes them vulnerable to price manipulation, for example by artificially pushing up the price
- The large increase in popularity can attract providers with fraudulent intentions. For example, you can become a victim of a pyramid scheme with virtual currency.
- This allows you to lose your invested money
- The AFM advises consumers who want to invest in virtual currencies to get to know the product well.
- Be aware of the risks and costs, spread your investments and never invest more money than you can miss.
Meer informatie over beleggen, vind je op de consumentenwebsite van de AFM.