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A momentous year for bitcoin … and related investor scams

The proverbial verdict is still out on the cryptocurrency bitcoin, which is still in its infancy.

Many people in the U.S. and across the globe don't seem willing to wait, though, for an emerging picture that provides hard empirical evidence regarding the stability and true value of bitcoin.

Instead, they buy.

And at a dizzying pace, without seeming regard for what bitcoin is selling for on a given day.

Consider this: Reportedly, bitcoin has realized an approximate 1,430% gain this year. A few select individuals have undoubtedly reaped millions from investing in the product.

Legions of others, though, haven't, with a recent article on warnings from the Financial Industry Regulatory Authority concerning the cryptocurrency stressing the great risks faced by most investors "looking to ride bitcoin mania."

A principal with FINRA strongly cautions would-be bitcoin buyers to tamp down hard on their emotions when considering a foray into cryptocurrency buying. He urges consumers to be "cold and rational and logical" when they are on the receiving end of pitches to add bitcoin to their portfolios.

FINRA stresses that the offered shares of companies peddling cryptocurrencies are highly speculative and the surrounding hype so intense that it can easily cloud judgment, even for experienced investors.

For some, the bitcoin frenzy evokes images of a decades-past American securities universe that was nearly unfettered in its lack of regulation and high number of fraudulent schemes aimed at fleecing a gullible public. FINRA today warns of yesteryear-like "pump and dump" schemes that can be employed to jack up the price of bitcoin to levels flatly unrelated to true value.

Bitcoin is obviously irresistible to many investors globally.

FINRA simply warns such individuals to be as careful as possible when operating within the cryptocurrency realm.

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