UBS has joined the phalanx of banks showing concern over their customers financing in digital assets.
Swiss transnational investment banking giant, UBS, has alerted its clients that crypto assets cbe unsuitable for skilled investors if regulatory pressure continues.
In a note sent to clients last week, the worldwide wealth management team at UBS aforementioned China’s latest suppression had hurt crypto costs and operators, cautioning that additional regulative pushback worldwide may exacerbate the downward pressure on digital asset prices:
“Regulators have demonstrated they will and can suppress crypto, thus we suggest investors keep clear and build their portfolio around less risky assets. We’ve long warned that shifting capitalist sentiment or regulatory crackdowns may pop bubble-like crypto markets.”
While UBS acknowledged that additional crypto gains might be potential, they stressed the risks the speculative asset category may create to investors:
“While we won’t rule out future price gains in cryptos, we have a tendency to see this as a speculative market that poses important risks to professional investors.”
The Swiss bank conjointly warned regarding leveraged commercialism, stating “Crypto trading practices, like extending 50X or 100X leverage, seem basically at odds with thought finance regulation.”
The revived Chinese suppression on Bitcoin mining operations, that began in late April, has seen mixed analysis from the crypto community, with some contesting the migration of hash power from China offers the Bitcoin mining trade a chance to enhance its ecological footprint and to further alter the network.
The banks see it otherwise, however, with UBS fearing that China’s actions can produce a cascade result round the world from money regulators.
UBS’ forecast already seems to be coming true with the United Kingdom’s Financial Conduct Authority taking action against the world’s largest digital quality exchange, Binance, on June 27.
A number of leading main street banks within the U.K. together with TSB, NatWest, and Barclays, have restricted their customers’ access to crypto exchanges since the FCA took action against Binance in late June month.
In May, Cointelegraph reported that UBS was reported to be performing on launching crypto trading services for rich customers.