BOSTON (WWLP) – Secretary of the Commonwealth William Galvin is warning residents to take precaution before investing in Bitcoin.
Bitcoin is a worldwide digital currency that was once called the future of money. Many people who invest in Bitcoin hope its value will increase.
In a release sent to 22News, Galvin called Bitcoin a craze that could leave average investors with a worthless product.
“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,” Galvin wrote.
Galvin warned that Bitcoin is not backed by the United States or any government, and that unrecoverable losses can occur when hackers gain access to the virtual wallets in which Bitcoin is stored.
Galvin also recommends investors to consider the following before purchasing Bitcoin:
- Carefully investigate the seller before making a purchase. You can check the registration status of someone offering to sell Bitcoin by calling 1-800-269-5428.
- Bitcoin values fluctuate enormously. Be prepared for radical value changes including single day drops.
- Bitcoin investing is considered to be speculation since the value is not related to any economic parameters.
- Unregulated and ambiguous nature of Bitcoin makes it susceptible to investment scams and other fraud schemes.