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Guide to Cryptocurrencies

  • Understand what cryptocurrency is.
  • Describe the regulator's approach to cryptocurrency.
  • Identify the benefits of the technology that enables cryptocurrency transactions.
CPD
Approx.60min
Guide to Cryptocurrencies

Introduction

Once thought of as the wild west of investments, cryptocurrency has become so popular that regulators have been forced to get involved; to safeguard people's investments and prevent fraud.

At the same time, with the FCA clarifying elements of cryptocurrency it wants to regulate, this perhaps is giving the sector some credibility.

Still, this will probably not convince the mass of cynical advisers out there that it is a viable investment channel at the moment.

But with its growing popularity among investors, the question is; for how long can advisers continue to ignore it?

When Bitcoin, one of the more well known cryptocurrencies, came into existence in 2008, it enabled with peer-to-peer exchanges using blockchain technology. Its use of cryptography to control how it is created and managed led to it being called cryptocurrency.

Since its genesis the value of Bitcoin has grown exponentially from 2009 when it had a price of just $0.00076 to where it currently stands at around $12,000 - fluctuating wildly in that time and grabbing many headlines. 

Bitcoin is not the only cryptocurrency. And as its popularity and that of other cryptocurrencies have grown, the questions now being raised are around its viability, security and sustainability as an investment tool.

This guide will look at how cryptocurrency differs from other cryptoassets, who should be investing in them, what the regulator's approach is, what its legacy will be and why this is important for advisers.

This guide is worth an indicative 60 minutes of CPD.

Contributors to this guide include: Arun Srivastava, partner at Paul Hastings; Simon Peters, analyst at Etoro; Philip Milton, financial planner at Philip J Milton; Adrian Lowcock, head of personal investing at Willis Owen; Daniele Mensi, managing director at NextHash; Scott Gallacher, chartered financial planner at Rowley Turton Private Wealth Management; Russ Mould, investment director at AJ Bell; Tyler Welmans, blockchain lead UK at Deloitte; Lyndon Lyons, senior manager at Deloitte; Laura Suter, personal finance analyst at AJ Bell; Andrew Robbins, partner at RSM; Richard Byworth, chief executive of Diginex; Deloitte and Financial Conduct Authority.

In this guide

CPD
Approx.60min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Arun Srivastava, what is influencing the UK's approach to cryptocurrency policy?

  2. According to Lyndon Lyons, what is one of the downsides to blockchain for advisers?

  3. What are the three types of cryptoassets?

  4. According to Russ Mould what is driving the popularity of cryptocurrencies?

  5. True or false, cryptocurrencies will now be regulated by the FCA.

  6. How does Deloitte define blockhain?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Understand what cryptocurrency is.
  • Describe the regulator's approach to cryptocurrency.
  • Identify the benefits of the technology that enables cryptocurrency transactions.

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