A stable, well-functioning financial market for allA stable, well-functioning financial market for allFour reasons not to buy cryptoassets
Right now, the media is filled with reporting on cryptoassets, and various investment tips are being shared on social media. Even though regulations for the cryptomarket are under development, it will continue to be very risky for consumers to invest in crypto. We have listed four reasons not to invest in them.
According to FI's household survey in 2023, approximately six per cent of the Swedish population had invested in cryptoassets despite these investments being very risky and there currently being no consumer protection in place. Even though new regulations, such as the MiCA Regulation, are pending and will regulate the market, trading in cryptoassets is still considered to be a high-risk activity.
"The market can fluctuate sharply, and it is difficult to accurately value most cryptoassets. The risk that you will lose money is high," says Charlotte Fried, Head of Payment Policy at FI.
Are you considering an investment in cryptoassets? Here are four facts that you should know.
Consumers have little protection
Cryptoassets are currently unregulated and for the most part not subject to FI's supervision. New regulations are not yet applicable, and even after the regulations have entered into force investing in cryptoassets will continue to be risky. There is, for example, a high risk of fraud, hacker attacks, and other security problems that you as a consumer are not protected against when you invest.
The value can fall sharply
The price of cryptoassets swings rapidly. Many cryptoassets also do not have an underlying value like, for example, shares and funds. This makes valuation difficult.
Adverse environmental impact
The mining of bitcoin and some other cryptoassets consumes large amounts of electricity. Despite attempts by some cryptoassets to reduce energy use, the consumption of electricity is higher today than ever before, resulting in environmentally harmful carbon emissions.
Risk of money laundering and terrorist financing
Cryptoassets are used to launder money and finance terrorism. The quickness of transactions, global reach, potential for pseudoanonymity, and the possibility of conducting transactions without financial intermediaries make cryptoassets attractive for criminals.
