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The value of the cryptocurrency has plummeted in recent weeks to less than half its peak in
December
Lloyds Banking Group has banned credit card customers from buying Bitcoin with fears they
could be left in debt as the cryptocurrency's value deflates.
The banking giant, which includes Halifax , MBNA and Bank of Scotland, is thought to be
the first in the UK to ban credit card customers from borrowing to buy the digital currency,
which has more than halved in value in recent months.
Bitcoin's slide has led to concerns that people who borrow money to purchase it will be left
with large debts if the virtual currency continues to depreciate.
Significant numbers of people in Britain are thought to have bought Bitcoin as it surged in
value, peaking at nearly 20,000 US dollars (£14,465) in December.
The value of Bitcoin has fallen in recent weeks (Image: AsiaPac)
As news of Lloyds's ban emerged on Sunday the value was around 8,000 dollars (around
£5,700).
A spokeswoman for the banking group said: "Across Lloyds Bank, Bank of Scotland, Halifax
and MBNA, we do not accept credit card transactions involving the purchase of
cryptocurrencies."
How to invest in bitcoin
For people wanting to test the water – or even dive straight in – we decided to speak to the
experts to get some help.
“I’ve been involved for two years now, and we have seen explosive growth in these
currencies, along with tremendous volatility,” said David Siegel, and internet pioneer and
founder of blockchain innovation community 20|30 .
He thinks that the future is bright for crypto currencies, but it will be a bumpy ride along the
way. Here are his 10 rules for investing in them:
Put a small amount of money, like $100, into an exchange account. Use a reputable
exchange like Lykke , Coinbase , Kraken , etc.
Buy some cryptocurrencies to learn about them.
Go to YouTube and watch videos on crypto-investing, cold storage, security, talks at recent
events, etc.
Read about new developments on Bitcoin Magazine , CoinDesk , Brave New Coin , etc.
Dedicate no more than 10% of your entire investment portfolio to crypto-investments.
Diversify! Plan to buy at least ten coins/tokens. Learn about index investing at
www.tokenfactory.io .
Carve out about one third of your money. Put this third into Bitcoin, third into ether, and one
third into 3-5 other coins/tokens you like.
Wait and watch. The volatility will almost certainly present buying opportunities.
Work your way into your portfolio over time. If prices go down, buy more. Plan to be fully
invested within 12-24 months.
After you buy, put your coins into cold storage . Don’t trade. Buy and hold for the long run.
The move follows warnings by regulators in the US, South Korea, China, Russia and India
over the cryptocurrency.
Germany's Bundesbank has also called for global regulation of Bitcoin and France's finance
minister wants tougher rules for cryptocurrencies.
Meanwhile, Facebook banned adverts for Bitcoin and other cryptocurrencies on its sites
after recent criticism from users about scams and hoaxes being promoted in their newsfeed.
Critics say cryptocurrencies are used by criminals and rogue states to carry out clandestine
transactions.
Earlier this month, US billionaire Warren Buffett ruled out a foray into cryptocurrencies,
warning that the Bitcoin boom will "come to a bad ending".
Warren Buffett has expressed concerns over the future of cryptocurrencies (Image: Getty)
The chairman and chief executive of Berkshire Hathaway has joined the chorus of voices
criticising the digital currency.
His comments came just a day after JP Morgan chief executive Jamie Dimon said he