UBS Wealth compares cryptocurrencies to devalued Netscape and MySpace

UBS Wealth cautions crypto prices can fall to zero.

Strategists at UBS Global Wealth Management, one of the world’s largest private wealth managers, warned investors amid the rally in cryptocurrency markets about the risk of losing all their money, Bloomberg.

The Swiss firm believes that in the long term the sector will face significant risks.

Among the latest, they noted regulation and potential competition from central bank digital currencies (CBDCs).

“From our perspective, little can prevent the price of a cryptocurrency from dropping to zero when a more advanced version is launched or if regulatory changes dampen market sentiment. Netscape and MySpace are examples of web applications that enjoyed broad popularity, but eventually disappeared,” says Michael Bollinger, UBS Wealth’s chief investment officer for Global Emerging Markets.

UBS Wealth noted that in the near term cryptocurrencies could continue to rise due to market dynamics, institutional adoption, and limited supply. However, experts advised cryptocurrency investors to “limit the size of their investments to the amount they can afford to lose.”

As a reminder, the UK Financial Conduct Authority (FCA) warned investors in cryptocurrencies about the risk of losing all their money. Earlier the regulator banned the sale of derivatives based on digital assets to retail investors.

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