Surely you’ve heard of virtual currencies or cryptocurrencies. Among which bitcoin is the most popular example.The cryptocurrencies or virtual currencies are offered through the internet in a global way and are sometimes presented, as an alternative to legal tender money, although it has very different characteristics:
· It is not obligatory to accept them as a means of payment of debts or other obligations
· Its circulation is very limited
· Their value fluctuates strongly, so they can not be considered a good deposit of value or a stable unit of account.
The strong fluctuations experienced by these cryptocurrencies that seem typical of the classic speculative bubbles are well known.
As an example, the average value of bitcoin in the main platforms in which it trades increased in 2017, going from approximately 850 euros per unit at the beginning of the year to over 16,000 euros in mid-December. Since then, the trend has been downward. On February 5, 2018 its price was below 5,500 euros. Which is a drop of more than 65% from the highs of December. A person who had bought bitcoins at the end of 2017 and sold them today would suffer very notable losses.
In addition, numerous actions to raise funds from investors are being carried out to finance projects through the so-called initial offers of cryptocurrencies or ICO. The expression ICO can refer both to the actual issuance of cryptocurrencies and to the issuance of rights of various kinds. Generally referred to as tokens. These assets are put up for sale in exchange for cryptocurrencies such as bitcoins or ethers or official currency (for example, euros).
Before investing in cryptocurrencies or participating in an ICO, consider the following aspects:
1. To date, no ICO has been registered, authorized or verified by any supervisory body in Spain. Therefore, there are no cryptocurrencies or tokens issued in ICO whose acquisition or possession in. Spain can benefit from any of the guarantees or protections provided for in the regulations on banking or investment products.
Investments in cryptocurrencies or in ICO outside regulation are not protected by any mechanism similar to that which protects cash or securities deposited in credit institutions and investment services companies.
2. Before buying this type of digital assets or investing in products related to them, consider all the associated risks and assess whether you have enough information to understand what is being offered to you. In this type of investment there is a high risk of loss or fraud.
3. Cryptocurrencies lack intrinsic value, becoming highly speculative investments. In addition, its strong dependence on poorly consolidated technologies does not exclude the possibility of operational failures and cyber threats. That could lead to temporary unavailability or, in extreme cases, the total loss of the amounts invested.
4. The absence of markets comparable to the organized securities markets subject to regulation may make it difficult to sell cryptocurrencies or tokens issued in ICO to obtain conventional cash.
5. In the case of ICOs, the information that is made available to investors is usually not audited and is often incomplete. Generally, it emphasizes the potential benefits, minimizing references to risks.