Crypto Update – June 21

Financial-Planning
Financial-Planning

Article by Phil

There seems to be news about cryptocurrency developments almost daily, so we thought we’d better add more to our news section to keep you up to date.

You can read our previous posts here to catch up.

The latest news comes from the Boring Money Advice Survey 2021.  According to the survey, almost 10% of “advised” investors hold cryptocurrency as part of their investment portfolio. That’s an estimated 350,000 investors.

Of course, these crypto holdings are held outside of “advised” portfolios because they are unregulated.

It seems that investors are attracted to the speculative nature of cryptocurrencies and are holding them as a gamble, perhaps afraid to miss out. Many advisers are not even being told about the holdings. That’s perhaps not surprising because of their volatile nature and of their links to organised crime.

A further threat is also emerging from the fast-growing ESG (Environmentally Sustainable Governance) investment market because Cryptocurrency is the polar opposite of everything ESG stands for. It isn’t environmentally friendly, it isn’t sustainable, and it has no governance whatsoever, so it sits absolutely outside investments with any green credentials. It’s interesting that Tesla has just recently announced that it will no longer be accepting payments by cryptocurrencies. This is seen as an early response what it expects to be an ESG backlash on the horizon.

In addition, the FCA has also raised more “concerns” about money laundering within the crypto asset “community”. The FCA had previously given crypto dealers a period of grace to get their money laundering procedures in place before crypto dealing comes under their regulation. However, it has seen what it describes as an “alarming” number of firms withdrawing their applications for regulation. Presumably because they’ve realised that they cannot fulfil money laundering requirements in many cases. One simple money laundering test is the ability to verify the source of funds as being legitimate. In market know to be favoured by the criminal underworld, this would obviously be difficult.

The FCA have now extended the period of grace to comply until March 31st, 2022.

If you are considering cryptocurrency investments, you really should think about why there will be almost no “regulated” dealers to use.

The FCA appears to be really keen to deter crypto investments and has again issued advice that investors should “expect to lose all their money” if they invest. That’s how volatile the FCA thinks it is. The message doesn’t appear to be getting through however,

Latest figures show that the number of investors in the UK has increased to 2.3 million people up from 1.9 million last yar. Astonishingly 38% of those surveyed about their “investment” in crypto didn’t think it was a gamble! Despite the FCA warnings.

Personally, I find it incredible that in our new “green” world 2.3 million people are prepared to “invest” into “assets” which finance terrorism and crime – the double standards are breath taking.

One of the issues may be that younger people are the main “investors” and they don’t really remember the impact of the 2008 crash or the dotcom bubble of the early 2000’s so haven’t experienced the shock of financial loss.

The Importance of Asset Allocation and Diversification

Christina Clegg Financial Planning Services explain the importance of managing your asset portfolio.

If you have any questions about Financial Planning please feel free to give us a call on 01282 614444 or drop us an e mail to enquiries@ccfps.co.uk

Awards and Accreditations

Pension Transfer Gold Standard
Investment-Planner
Financial Vulnerability Taskforce
VF 23
Vouched For 2022
Vouched For 2021
Vouched For 2020
Vouched For 2019
Vouched For 2018
Vouched For 2017
Vouched For 2016
Vouched For 2015
Vouched For 2014

The service provided was both professional and extremely helpful, without Christina’s help we would have lost money and took a long time to obtain our pension funds.

Mr & Mrs W

Friendly, approachable and reliable. Christina always keeps appointments, returns calls, and advises to your individual needs.

Ms F

Adele was very easy to like from the moment we met her. She always arrives on time, and she has changed our lives in as much as showing us how to enjoy our money more.

Mrs W