Buying bitcoin? Prepare to lose it all, says City watchdog boss

SAVERS who bet their nest eggs on bitcoin must be prepared to lose everything, the City watchdog’s boss has warned.

Andrew Bailey said the notoriously volatile internet currency could come crashing to earth and that its backers must be aware of the risks.

Bitcoin’s value has exploded from £750 to more than £13,250 so far this year, triggering a stampede to invest by fortune-hunters. But the price frequently swings wildly, often moving as much as 20 per cent in a single day. And there are widespread fears in the city that it is now a massive bubble that will ultimately burst, triggering vast losses for those involved.

Mr Bailey, chief executive of the Financial Conduct Authority, said rises and falls are hard to predict – meaning buyers could suffer badly if they get in at the wrong moment.

Traders are meddling in a new, untested product where there is no consumer protection, he said, and buying bitcoin is more like gambling than trading in a real currency backed by a central bank.

A home in Colchester is making history as the first in the UK to be sold for bitcoin. The sale of the new four-bedroom house, still under construction, should be completed early next week, according to developers Go Homes.