WASHINGTON (dpa-AFX) - Massachusetts' securities regulator has warned investors to take precaution before investing in cryptocurrencies such as bitcoin, saying they could just be another 'worthless product.'
William Galvin, Massachusetts Secretary of the Commonwealth, issued a seven-point warning not to get caught up in Bitcoin speculation.
'Bitcoin is just the latest in a history of speculative bubbles that most often burst, leaving the average investors with a worthless product,' said Galvin, who is the principal public information officer of the state.
He warned potential investors that 'Going back to the 1600s with tulip mania to the present Bitcoin craze, chasing the next best thing will, more often than not, end in disaster for the average investor.'
Because trading on the CBOE gives Bitcoin an air of legitimacy, investors must be aware of the inherent risks of investing in Bitcoin and the fraudulent schemes associated with it, Galvin's office warned.
These are some of the other main warnings that Galvin listed: Carefully investigate the seller before making a purchase of Bitcoin; Irrecoverable losses can occur when Bitcoin is stolen from these virtual wallets; Bitcoin and other virtual currencies are based on a public ledger called the 'Blockchain,' which is still experimental and is subject to changes, errors, or criminal activity which could adversely affect your virtual wallet or erase your Bitcoin value.
New England's most populated region now joins six other American states that have denounced the digital currency.
Connecticut, Georgia, Hawaii, New Mexico, New York, and Washington are more or less hostile to bitcoin.
No legislation has been proposed by Massachusetts.
Bitcoin futures began trading on the Chicago Board Options Exchange (CBOE) on December 10, and CME Group a week later.
Bitcoin continues to attract intense media attention as the price of Bitcoin dips and soars.
The digital currency approached $20,000 on Sunday, before drifting below $19,000.
Conflicting information about Bitcoin abounds, with some calling it a 'craze' or a 'bubble' and others touting it as an amazing investment.
Bitcoin has also been the target of major hacks at the exchange and wallet levels, leaving many Bitcoin holders with huge losses.
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