If you’re tempted to join the cryptocurrency bandwagon, regulators say you should take a pause before you click “buy.”
Following bitcoin’s meteoric price rise in 2017 — from just under $1,000 in January to nearly $20,000 in December — there’s been a rush to cash in on cryptocurrencies and the blockchain technology that makes them possible.
Numerous investment vehicles have been created to meet this surge in consumer demand.
In December, bitcoin futures began trading on two exchanges, the Chicago Board Options Exchange and the CME Group. In January, Kodak saw its shares rise on the announcement of its “KodakCoin” digital currency. Even Venezuela is making moves into digital money, with President Nicolas Maduro announcing the development of a “petro cryptocurrency” backed by the country’s oil and gas reserves.
But where some see opportunity, regulators are preaching caution. Last week, the Securities and Exchange Commission shot down proposals from two exchange-traded funds seeking to offer investors a way to trade in cryptocurrencies on more traditional exchanges.