- Experts comment on the latest FCA advertising laws
- They largely agree with the agency’s arguments.
The UK’s ban on advertising cryptocurrencies as an “inflation bailout” is largely fair. Such opinion industry experts expressed in an interview with Coindesk.
“People were buying cryptocurrencies during a bull market amid rising inflation. And later they lost money because the crypto-winter came. We can say that the message about inflation was harmful.” – explains Ryan Shea, an economist at the British crypto exchange Trakx.
Recall that last week the British regulator FCA updated the rules for advertising cryptocurrencies. Firms are now prohibited from encouraging users to take action, such as offering signup bonuses, first deposit, or refer-a-friend promotions. At the same time, advertising should not describe cryptocurrency as a remedy for inflation.
This begs the popular thesis that Bitcoin is a salvation from rising prices. After all, BTC has a limited supply, unlike paper money, which can be issued in unlimited quantities.
In an interview with CoinDesk, experts agreed that Bitcoin could hold its own against inflation in the long run. But this does not apply to tokens with an unlimited supply. Novice investors often do not know about such nuances. They perceive altcoins as the same coin as BTC (only one times cheaper). And they invest money, hoping to protect themselves from inflation.
In general, the topic of inflation is more of a medium-term and long-term nature. After all, the fiat money supply increases gradually, not sharply. Therefore, the effect of investing in BTC and other valuable crypto-assets comes in a few years.