Bank of England Warns Finance Firms Over Crypto Risks

Traditional financial institutions are warning investors over risks associated with crypto investing.

The Bank of England's deputy governor for prudential regulation has warned banks about exposure to cryptocurrency-related assets in a new letter. (...)
"In their short history, crypto-assets have exhibited high price volatility and relative illiquidity. Crypto-assets also raise concerns related to misconduct and market integrity – many appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks. Entering into activity related to crypto-assets may give also rise to reputational risks."

This isn't FUD. Daily changes of 3-5% /with many pumps over 2% in less than 60 minutes) aren't acceptable for risk standards. For common adopted standards like the "prudent person rule" standard (https://www.investopedia.com/terms/p/prudentmanrule.asp ) crypto investing is too risky. Furthermore, by themselves, crypto exchanges don't guarantee the safety and technical standards that institutional investors need of for investing in crypto market.

Remember also that one of best tools of portfolio management for lowering risk is diversification. But, given the high correlation among all the crypto, diversify is very hard and a bit inefficient in bitcoin market - so rational investors (for example institutional investors) have a lot of problems.

In the letter, Woods also took the time to acknowledge that distributed ledgers and blockchain technology exist separately from cryptocurrencies, writing, "We also recognise that the underlying distributed ledger or cryptographic technologies, on which many crypto-assets rely, have significant potential to benefit the efficiency and resilience of the financial system over time."

Anyway, blockchain tecnology has a great potential. But "blockchain" oesn't mean "coin or token": tokens/coins can be a part of blockchain operation, but they aren't essential. So do not think that the growth of blockchain economics will lead for sure to a cryptomarket growth.
It will be a long, hard and interesting game. Good luck guys!

Ps: original article here https://www.coindesk.com/bank-of-england-warns-finance-firms-over-crypto-risks/