- The European Union’s regulators are keen on the environmental impact made by the crypto assets that use PoW.
- EU consumers are now warned that the growing crypto market does not offer consumers any protection of its volatile nature.
Three European regulators have warned consumers to stay alert when making investments in crypto assets. The three regulators include the European Union’s securities, banking, and insurance watchdogs. In a joint statement on Thursday, the regulators said that consumers risk losing all their invested money. Of note, EU consumers are now warned that the growing crypto market does not offer consumer protection in full despite such claims in advertisements.
“Consumers face the very real possibility of losing all their invested money if they buy these assets,” the EU regulators noted in a statement.
The European Union’s regulators are keen on the environmental impact made by the crypto assets that use PoW. On this, the regulator highlighted the enormous amount of energy consumed in the creation of some crypto assets.
Bitcoin and Ethereum account for approximately 60 percent of the crypto market, according to CoinGecko. Notably, both digital assets are currently dependent on proof of work mining to secure the network. However, the latter is transitioning to proof of stake through the Beacon chain.
The rest of the crypto market has a market share of approximately 40 percent. With the entire crypto market cap at around $2 trillion, this leaves around $760B to altcoins. Nevertheless, the regulators warned of the entire crypto market as a threat to uninformed consumers. the statement said;
Consumers should be alert to the risks of misleading advertisements, including via social media and influencers. Consumers should be particularly wary of promised fast or high returns, especially those that look too good to be true,
Regulators on crypto and impending bear market
Market analysts are forecasting a bear market that could sustain until the next Bitcoin halving. Popular crypto trader Altcoin Gordon warned his Twitter followers that Bitcoin is headed to $10K.
Most of the billionaires in my circle tell me they have no interest in buying bitcoin above $28k.
I am not saying we will definitely drop there, just an interesting observation,
Furthermore, according to fear/greed indexes tracked by different sources on consumers, extreme fear has reigned over the past few weeks. Hereby indicating sell pressure may overhaul the buyers in coming quarters.
The crypto market has been characterized by huge volatility, bringing with it high returns and losses. As such, consumers are often warned to stay away from crypto projects that seem too good to be true. Scams are more prevalent in such projects that promise consumers insane high returns.
Currently, global regulators are more disturbed by crypto scams than the high volatility in the market. For instance, the Australian Competition and Consumer Commission (ACCC) has accused Meta of a cryptocurrency ad scam.
“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” explained ACCC chair Rod Sims.
It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in an ad to visit the ad’s landing page, using Facebook algorithms. Those visits to landing pages from ads generate substantial revenue for Facebook.