Bitcoin, which skyrocketed above $19,000 in value last week, is in a “mania” phase, according to securities regulator Joseph Borg who said some people are even borrowing money to get in on the action.
“We've seen mortgages being taken out to buy bitcoin… People do credit cards, equity lines," he told CNBC.
The president of the North American Securities Administrators Association (the oldest investor protection organization in the world), Borg said: “This is not something a guy who's making $100,000 a year, who's got a mortgage and two kids in college, ought to be invested in.”
According to the regulator, we’re “on this mania curve. At some point in time, there's got to be a leveling off. Cryptocurrency is here to stay. The blockchain is here to stay. Whether it is bitcoin or not, I don't know.”
He also says futures contracts do not legitimize the digital currency. On Sunday, bitcoin futures debuted on the regulated Cboe exchange under the XBT ticker symbol. The first exchange in the US to trade bitcoin futures, Cboe, is expected to be followed by another Chicago-based stock market CME on December 18. The NASDAQ is planning to launch bitcoin futures next year.
Borg is also director of the Alabama Securities Commission and said futures contracts are regulated, but bitcoin itself is not because innovation and technology always outrun regulation.
“As [technology] continues to accelerate and continues to increase, regulators have got to understand what it is that the innovation's coming up with, and we're still trying to get educated,” he said.
“We're looking at it from a money transmission point of view, but that doesn't cover the entire bitcoin space.”
Bitcoin started the year below $1,000 and was trading near $17,000 per token on Tuesday.
The post People taking out mortgages to buy bitcoin – securities regulator appeared first on News Wire Now.