Rolling coverage of the latest economic and financial news

9.23am GMT

Bitcoin’s recent surge has been partly attributed to institutional investors buying into cryptocurrencies, with some judging that cryptocurrencies are a credible asset class offering protection against inflation.

But Laith Khalaf, financial analyst at AJ Bell, points out that this doesn’t make crypto a guaranteed goldmine.

The idea of getting rich quick is as dangerous as it is attractive and anyone who invests in crypto currencies should be prepared to lose their shirt, or a considerable portion of it.

“The regulator is clearly concerned that the high risks already inherent in cryptoassets are being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in cryptoassets. You can see how the rapid price appreciation of Bitcoin, combined with aggressive marketing and low interest rates on cash, creates a perfect storm for consumers looking to get a decent return on their money.

9.04am GMT

In the City, the FTSE 100 share index has opened lower – down 25 points or 0.35% at 6848.

Without the artificial buzz of the New Year, or a seismic event like a pair of Senate races, the markets were forced to contend with the day-to-day realities of trading in 2021.

For the FTSE, that means the prospect of even tighter restrictions in the UK, as experts believe the current level of lockdown isn’t having the desired effect. Practically, any further measures the government could implement should have minimal impact on the blue chip index’s individual components. Symbolically, however, the shift towards harsher constraints may undermine the FTSE’s recent growth.

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