RBI issues third warning on cryptocurrency: Bitcoin crosses $12,000 mark but central bank says invest'at your own risk'

Bitcoin today for the first time ever breached $12,000 Mark. The virtual currency has soared more than 1000 percent since the start of the year. Last Wednesday, it was trading at $9,500 Nothing moves so fast in the financial world.

Bitcoin today for the first time ever breached $12,000 Mark. The virtual currency has soared more than 1, 000 percent since the start of the year. Last Wednesday it was trading at 9500. Nothing moves so fast in the financial world. So what is fuelling this rapid rise of Bitcoin? This is something that has puzzled many bankers and financial analysts. Business magnet Warren buffet recently called it a real bubble. He is not alone to caution the investor against cryptocurrency. Garrick hileman a research fellow at the University of Cambridge's judge business school, earlier said : "what's happening right now has nothing to do with Bitcoins functionality as a currency this is pure mania that's taken hold." despite these cautionary words from financial experts, Bitcoin continues to rise.

now another warning has come for the virtual currency investor. This time from the reserve bank of India. The central bank on wednesday issued its third warning, reminding the investor of its earlier concerns. In the first warning issued on December 24,2013 the RBI said that the creation, trading or usage of virtual currencies or VCs as a medium for payment are not authorised by any central bank of monetary authority. "no regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities," it added.

The RBI's next warning came this year on February 1. It reiterated that the reserve bank has not given any license or authorisation to any entities to operate some schemes or deal with Bitcoin or any virtual currency. The bank regulator categorically said that any investor or trader dealing with virtual currencies will be doing so at their own risk. Why the RBI feels that the investor could lose their money in cryptocurrency.the RBI listed out some risk that virtual currency may pose to investors.

The RBI says that virtual currency being in digital form are stored in digital-electronic media that are called electronic wallets. Therefore, they are prone to losses arising out of hackin loss of password.