Cryptocurrencies: Don’t let them dazzle you


In the last few years there has been a worldwide proliferation of certain assets generally known as virtual currencies or cryptocurrencies, the most popular of which is Bitcoin. These assets are not backed by a central bank or any other public authority, and while they are presented as an alternative to legal tender, their characteristics are starkly different:

  • There is no obligation to accept them as a means of payment of debt.
  • Their circulation is highly limited.
  • Their value fluctuates widely, meaning that they cannot be considered as a sound store of value or a stable unit of account.

In 2018, the Banco de España and the CNMV warnedAbre en ventana nueva small savers of the dangers attached to such investments owing, among other risks, to the extreme volatility of cryptocurrencies, which may ultimately result in the total loss of the capital invested.

Those risks include:

  • Problems of liquidity and volatility, prompting sharp price fluctuations. The causes of these price fluctuations are not always transparent and could be manipulated. And bear in mind that you may find it difficult to sell the assets should you need to recoup your investment. 
  • High risk of loss of investment: cryptocurrencies are highly speculative investments.
  • Difficulties guaranteeing consumer rights: no cryptocurrency issue has been registered, authorised or verified by any supervisory agency in Spain. Accordingly, if you have bought cryptocurrencies, you have none of the guarantees or safeguards envisaged in the regulations for banking and investment products.
  • Problems arising from their cross-border nature: on many occasions the various market participants involved in the issuance, custody and marketing of cryptocurrencies are not located in Spain, meaning that the resolution of any conflict might lie outside the remit of the Spanish authorities.


If an opportunity sounds too good to be true or if you are urged to take swift action, be on your guard and exercise caution, as you may lose your money.

Remember that cryptocurrencies are complex investments and far removed from the interests of small savers. If such an investment still appeals to you, before buying or subscribing any cryptocurrency-related products, make sure you have all the information you need to fully understand them and consider all of the associated risks.

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