According to a report from Business Insider, UBS’s global wealth management division pointed to China’s crypto crackdown as an example of the considerable negative impact on price induced by regulators.
Since China’s recent enforcement of shutting down Bitcoin miners in the country and restricting businesses associated with cryptocurrency trading and operations, crypto prices have fallen drastically.
UBS warned investors that tougher rules might already be in the works in countries like the U.K. and U.S.
“Regulators have demonstrated they can and will crackdown on crypto. So we suggest investors stay clear, and build their portfolio around less risky assets,” said the UBS note. “We’ve long warned that shifting investor sentiment or regulatory crackdowns could pop bubble-like crypto markets.”
The bank also commented on common crypto trading practices, where exchanges offer 50x and 100x leverage to traders, saying they appear at odds with mainstream finance regulation.
“While we can’t rule out future price gains in cryptos, we see this as a speculative market that poses significant risks to professional investors,” said the note.
UBS’s most recent stance on cryptocurrency comes in contrast to previous reports that the bank was looking into ways to offer its wealthiest clients exposure to the asset class.
Price Action: Bitcoin, the leading cryptocurrency, was trading at $34,759 at the time of writing, gaining 1.64% over the past 24-hours.
This story originally appeared on Benzinga. © 2021 Benzinga.com.
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