At a recent press conference, Bank of England Governor Andrew Bailey cautioned people against placing all of their bets on cryptocurrency.
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In response to a question on the rising value of digital currencies, Bailey asserted that cryptocurrencies have no “intrinsic value” and that people should only invest in them if they are prepared to lose all of their money.
“That doesn’t mean to say people don’t put value on them, because they can have extrinsic value,” he clarified. But they have no intrinsic value.”
As CNBC notes, while digital currencies — including Bitcoin, Ethereum and Dogecoin — have spiked in recent months, the jump comes less than four years following a crypto bubble in 2017. That year, Bitcoin reached $20,000 but fell to $3,122 a year later.
“I’m going to say this very bluntly again,” Bailey reportedly said at the press conference. “Buy them only if you’re prepared to lose all your money.”
According to CNBC, Bailey’s message of caution similarly aligns with one from the U.K.’s Financial Conduct Authority (FCA) in January. Earlier this year, the FCA expressed concerns about high-return investments based on crypto assets, citing the lack of consumer protection, price volatility, product complexity, charges and fees and misleading marketing from firms that trade in crypto assets.
Others, including prominent gold investor Peter Schiff, have also taken issue with cryptocurrency — specifically Bitcoin. In an interview on Fox Business’ Making Money with Charles Payne, Schiff said that, “Bitcoin is the latest iteration of fool’s gold, and anybody buying it is ultimately a fool.”
Still, the criticism has done little to negatively impact the price of several notable cryptocurrencies this year. Last month, Bitcoin hit an all-time high of $63,000 just one day before cryptocurrency exchange Coinbase listed on Nasdaq. At the beginning of May, Ethereum similarly reached a record high, surpassing the $3,000 mark. But perhaps the biggest surprise of all so far has been Dogecoin, a digital currency that was created as a joke. In less than five months this year, the cryptocurrency has risen a whopping 14,180%.