Regulators across the country are worried about the ill effects of cryptocurrency on an unaware investor. As with other sectors, the crypto sector is also inflicted by fads and short-term trends. However, the extent and implications of it are much higher in this sector than in others. Keeping this scenario in mind, the Australian reserve bank has warned all investors to be careful of fad cryptocurrencies and investment schemes. The recent debacle surrounding the SQUID token was a worldwide occurrence. Many people lost huge amounts of money in this fad, and no agency in the world can do anything to help them get their money back. Many crypto firms also mention in their advertisements that there’s a high risk involved. Most crypto users understand this, but new investors have a tendency of following fads.
The problem of following fad cryptocurrencies is a pervasive issue for many years now. A rise in meme coins has been a major driving factor behind this. Online crypto communities are often used to spread fads and rumors, and common users have to pay the price. Regulators are trying to stop this trend due to eventual national economic loss.
RBA official Tony Richards talked to the Australian Corporate Treasury Association with respect to the dangers of cryptocurrency. Richards said that repeated wrong moves poses threat to the entire economic landscape of Australia. How things play out under the influence of top government bodies is subject to speculation.