EY: When investing in virtual assets, we must pay attention to two key aspects: volatility risk and supervision mechanism

Odaily Odaily News: In January 2024, the US SEC approved multiple ETFs that directly invest in Bitcoin to be listed in the United States, becoming a major milestone for cryptocurrencies. In July 2024, the US SEC approved the listing of multiple Ethereum spot ETFs. In addition to the United States, virtual asset spot ETFs have also been listed on exchanges in Canada, Australia, Hong Kong and other places. Ernst & Young reminds that when investing in virtual assets, you must pay attention to two key directions. One is volatility risk. Virtual assets are currently widely recognized as a commodity. Under different timings and regulatory trends, such commodities have relatively drastic rises and falls without price limits, and the transaction risk is high. Before engaging in related transactions, you should fully understand its operating model and be sure to carefully assess the possible risks. The second is the supervision mechanism. If investors trade through overseas virtual asset trading platforms, these overseas platforms are not institutions established in accordance with domestic laws and may not be supervised by foreign authorities. In addition, the relevant products are provided overseas, and the transparency of transaction information is not high. It is recommended that before investing, you should carefully consider the degree of supervision prudence of the trading platform's operating location and the compliance of the industry with laws. (udn)