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US Federal Reserve Governor warns the Crypto Investors

Dear Readers,

If you are involving in trading in stock and crypto markets, you will probably know the US Federal Reserve. The FED decisions are highly eyeing not only in the US but internationally and it had its own impact in the global share and crypto markets. 

In the recent meeting in early February also, US Fed hiked the interest rate by 25 basis points and it hinted that there would be another 50 basis point high @ 25 basis point each.  This was in the expected lines and we have seen a gradual and continuous rise in the crypto markets after this news as well.


On Friday, the US Federal Bank Governor Christopher Waller warned the crypto investors during his speech in the Global Interdependence Conference. He expressed his concerns that the global crypto investors could loose their crypto assets and warned banks to guard against bad actors and risks to the formal financial system. He said that the spill over to the broader financial system has been "minimal" so far and it is the high and critical time that the  regulators make sure to mitigate financial stability risks associated with stress in the crypto industry.

At the same time, he advised the banks to consider the constant engagement in cryptocurrency by means of 'KYC-know your customer' and anti-money laundering requirements and must ensure to monitor customers' business models. They should have the proper risk-management systems so that the bank is 'not left holding the bag' in case of any crypto melt down. 

He said that the Crypto Assets does not have an intrinsic value. If the investors would purchase the crypto assets, they should not get surprise if the value goes to zero at one point in time and warned that the losers should not expect the tax payers to socialise their losses. 

Speaking at the same conference several hours later, Philadelphia Fed President Patrick Harker presented the survey data which has been taken in October last which shows that despite those anticipated risks, the cryptocurrency is in growing demand- the interesting point in the survey that the demand was there among all sections of the society even in the crypto winter. 

As we all know the associated risks with the crypto investments that we made, we need to make sure that appropriate mitigation strategies to minimise the risks. As the crypto market is not yet regulated, we cannot represent for any legal remedies, financial protection such as insurance as well. The global central bank Governors are repeatedly warning the people against the crypto assets.  

During the recent times, we have also witnessed the ups and downs of the crypto markets.  We have also witnessed the collapses of the Crypto Exchanges and all the harder times as well. 

As an investor we need to know how to mitigate the risks and to make sure our investments in different investment instruments! 


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