Investing in Bitcoins? Beware, govt calls cryptocurrencies ponzi schemes

The government clarified that virtual currencies are not legal tender and are neither currencies nor coins

The Union government on Friday cautioned investors against trading in cryptocurrencies like bitcoin, and likened such investments to “Ponzi schemes”. 
 

“The VCs [virtual currencies] don’t have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs, therefore, is entirely a matter of mere speculation resulting in spurt and volatility in their prices… Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes,” the finance ministry said in a statement on Friday.

Experts said the government was taking a cautious stance against the use of cryptocurrencies,