Both, the US and UK regulators introduced new measures limiting access to Cryptocurrencies.
In the UK the measures are aiming to protect mainly retail investors who are at a much higher risk of losing their investment due to the lack of proper financial education.
The main focus group for the new regulation is the younger demographic, which is more likely to be seduced by online influencers and marketing slogans.
The online crypto buzz – often promoted as an easy and quick way to invest and multiply financial resources – is often nothing but a marketing tool in the “pump and dump” machine.
FCA points out that the younger population doesn’t often have enough understanding of the financial markets and therefore is prone to “sudden and unexpected losses”.
Additionally, many retail investors who decide to put money into crypto, only do so in response to the online news about yet another Bitcon’s new-all-time-high.
This often means many are “late to the party” and invest when the market is already very saturated and deep into the overbought red zone, which is when crypto whales are starting to sell their assets bringing the end to the bullish trend.
The new regulations only affect a small pool of crypto investors, however, this step doesn’t go unnoticed as it shows that governments are starting to put more resources into regulating cryptocurrencies.
