- Experts have commented on the FCA’s latest advertising laws
- They largely agree with the agency’s arguments
The UK ban on advertising cryptocurrencies as an “escape from inflation” is largely fair. This opinion was expressed by industry experts in an interview with Coindesk.
“People bought cryptocurrencies during the bull market amid rising inflation. And subsequently lost money, because the crypto-winter came. You could say that the message about inflation was harmful,” explains Ryan Shea, an economist at British cryptocurrency 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 bonuses for registration, first deposit, or “Bring a friend” promotions. And advertisements should not describe the cryptocurrency as a remedy for inflation.
The popular thesis that Bitcoin is an escape from rising prices is called for here.. 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 up against inflation in the long run. But this does not apply to tokens with unlimited supply. These nuances are often not known to novice investors. They perceive altcoins as the same coin as BTC (only times cheaper). And they invest, hoping to protect themselves against inflation.
In general, the topic of inflation is more medium- and long-term in nature. After all, the money supply of fiat increases gradually, not dramatically. Therefore, the effect from investing in BTC and other valuable crypto-assets comes in a few years.