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Bank of England Governor warns on crypto investments

CryptocurrencyMay 07, 2021 14:43
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© Reuters.

By Samuel Indyk

Investing.com – Yesterday’s Bank of England (BoE) decision and press conference will not go down as a historic meeting by any stretch, but one key important point was made by the governor during the last question.

When asked about the impact of the Bank of England’s ultra-loose monetary policy on financial markets (particularly Bitcoin and other cryptocurrencies), BoE Governor Andrew Bailey said that markets were something the Bank watches very carefully. However, it was his comments on cryptocurrencies that garnered most attention.

“Currency and crypto are two words that don’t go together for me,” Bailey said. “I try to use the more neutral ‘crypto assets’.”

It is not the first time Bailey has been vocal against cryptocurrencies and he continued to state that holders should be prepared nurse losses if investing in cryptocurrencies.

“They have no intrinsic value,” Bailey stated. “Now, that doesn’t mean to say people don’t put value on them because they can have extrinsic value.”

“I’m sorry, I’m going to say this very bluntly again: Buy them only if you’re prepared to lose all your money,” an exasperated sounding Bailey said.

Bubble vs the future?

The comments bring up the age-old argument of whether cryptocurrencies are in a bubble or whether they are the future of the monetary system and deserve some of the lofty valuations.

Recent spikes in numerous cryptocurrencies have seen some of the largest coins become worth in the tens of billions of dollars, and that is before you get to the size of Ethereum (above $400bln) and Bitcoin (above $1tln).

For example, Dogecoin, which was started as a joke based on a meme, is up over 12,500% year to date to a market cap of around $80bln. And some have argued it is set to rise further ahead of Tesla CEO Elon Musk’s appearance on Saturday Night Live this weekend.

On the other hand, major financial institutions have recently begun venturing into the crypto space. Just today, the Financial Times reported that Citigroup (NYSE:C) is considering setting up crypto services due to client interest. Meanwhile CNBC has reported that Goldman Sachs (NYSE:GS) has set up a newly created cryptocurrency trading desk.

And last week, the European Investment Bank announced they had sold a digital bond on the Ethereum network, the first such issuance using public blockchain technology.

You can watch Bailey’s comments on cryptocurrencies using the link here or fast forward the video below to 1:01:36.

Bank of England Governor warns on crypto investments
 

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Comments (29)
Oliver Nimmo
Oliver Nimmo May 08, 2021 1:22
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And paper money have some value, other than people's trust...
je ukbrist
je ukbrist May 08, 2021 1:22
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Exactly! Good point, institutions, middle mens, records, history. So yes. Gold ? Yes! History, record.He is not saying will not happen, he is not saying this can be a change of paradigm. He is saying watch out, because, this can go wrong like a lot of things in the past. Just see how bitcoing change in 5 days. Mate who will use thst yo buy or to sell anytjing? A tesla can worth 61k or 49k between Monday and Sunday same week.
Oliver Nimmo
Oliver Nimmo May 08, 2021 1:22
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And paper money have some value, other than people's trust...
Suleyman Esat
Suleyman Esat May 07, 2021 21:22
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just so he wants to buy cheap ethereum and btc
APC APC
APC APC May 07, 2021 19:00
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he says... as he quietly loads up on Bitcoin.
Ratan Priya
Ratan Priya May 07, 2021 18:39
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grapes are sour
Siddhant Jain
Siddhant Jain May 07, 2021 17:43
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Ban crypto all over the world as it would blow humanity to zero as only bunch of people holding chunks of it will control the world .People can make money by investing in people
Kevin Wilson
Kevin Wilson May 07, 2021 17:43
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Invest in crypto not people
marce peric
marce peric May 07, 2021 17:43
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Yeah only chunk of people are holding fiat also that blows humanity even more.
Ratan Priya
Ratan Priya May 07, 2021 16:59
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NGMI
Ratan Priya
Ratan Priya May 07, 2021 16:59
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NGMI
Mahfuzur Rahman
Mahfuzur Rahman May 07, 2021 16:32
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so dumb
Alexander Russo
Alexander Russo May 07, 2021 15:47
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and what is the intrinsic value of fiat money? You keep printing more of it and it's losing 'value'
Mandar Sontakke
Mandar Sontakke May 07, 2021 15:46
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I don't think what what he said was that negative. Its the truth that crypto is not a currency, rather its a transaction platform which is a lot more secured, efficient and fast as compared to traditional banking systems. In addition, crypto is not backed by anything unlike stocks, but then it is no different to Fiat which isn't backed by anything. Both fiat currencies and crypto derive value from the faith that people put in it.
John Pym
John Pym May 07, 2021 15:46
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*Crypto seems simmular to the big dipper. Been on a big dipper, it's not for me. Those sudden highs and lows are too scary.
Maith Mahmud
Maith Mahmud May 07, 2021 15:41
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#TELCOIN #SAFMOON
Wassai Arghushi
Wassai Arghushi May 07, 2021 15:25
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Lets be honest i do not like paper money anymore! So the king is technology 🙏
Christian Pittard
Christian Pittard May 07, 2021 15:25
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So what you're saying...... Is that it's got a value because we put a value on it......... Isn't that how the world works? #safemoon
Chris Hm
Chris Hm May 07, 2021 15:23
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Headline should read "Head of centalised institution sees no need for de-centralisation"
Fredrik Sohlberg
Fredrik Sohlberg May 07, 2021 15:15
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If you throw his own arguments back at him you can say that the £ has no intrinsic value as it's only back by the belief that it has value, same as Bitcoin..
Momin Nawaz
Momin Nawaz May 07, 2021 15:06
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This guy is jelaous
Andrius Dumbliauskas
Andrius Dumbliauskas May 07, 2021 15:06
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One more old man
Kamrun Riley
Kamrun Riley May 07, 2021 14:57
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Dont listen to this man. He works for a bank of course hes gonna tell you dont invest in crypto. Banks HATE crypto. Crypto >>>>>> Banks
Blow snow Simon
Blow snow Simon May 07, 2021 14:52
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Where will the tax come from? Assume all crypto investment is gone.
marco vv
marco vv May 07, 2021 14:52
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Bailey, get a grip, crypto is not the future anymore, it's the present. You are the past
Team Tatts
Team Tatts May 07, 2021 14:52
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what do the bank do when you put money in the bank??? thay invest and profit off your money.. bank = bad
Anthony Kelly
Anthony Kelly May 07, 2021 14:52
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So the guy in charge of physical money says he is not a fan of a digital based currency where his job isnt required. Shocker
Tom Chalmers
Tom Chalmers May 07, 2021 14:51
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Of course he will say this as the banks ate in danger of becoming obsolete
Ismaeel Ahmed
Ismaeel Ahmed May 07, 2021 14:50
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Another boomer who feels threatened by the potential of crypto taking over the traditional banking system and losing his job
 
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