Investors should be extremely vigilant when investing in cryptocurrencies as they can lose all their money, said Bank of England’s Governor.
Andrew Bailey – Bank of England Governor – warned about the potential risks involved with cryptocurrency investing. He argued that digital assets ”have no intrinsic value” and individuals who invest in them should be extra cautious.
The Governor Against Crypto
In a recent press conference regarding the skyrocketing prices of cryptocurrencies, Andrew Bailey warned people to be exceptionally careful when allocating funds to them. The Bank of England Governor opined that there is a high chance for investors to lose all their money if involved with digital assets:
”I’m going to say this very bluntly again. Buy them only if you’re prepared to lose all your money.”
Bailey even went further stating that cryptocurrencies lack any ”intrinsic value.” However, the British official believes people are not afraid to invest in them, which could have a positive effect in the future:
”They have no intrinsic value. That doesn’t mean to say people don’t put value on them, because they can have extrinsic value.”
Furthermore, Andrew Bailey added that he is not a big fan of putting the words ”crypto” and ”currency” together. According to him, the community should use other phrases such as ”crypto assets.”
This is the second anti-cryptocurrency opinion expressed by the Governor since the start of the year.
He questioned their role and success and said they won’t have a long-lasting effect on the financial markets.
Same Opinion – Different Expert
In a recent interview with Fox Business, BMO Capital Markets chief investment strategist Brian Belski shared very similar thoughts as Andrew Bailey. According to the executive, Bitcoin is not a currency nor an asset:
”What is the intrinsic value of bitcoin or crypto? From our land, we don’t know yet, and it is our official view from an investments strategy position that bitcoin and crypto should not be part of your asset allocation given the fact that it’s not an asset, it’s not a currency, it is a trading instrument.”
Belski acknowledged bitcoin’s run and skyrocketing price but added that the digital asset is located in a momentum-based market. He said BTC’s supply and demand situation is the real explanation why it can not be considered as an investment tool.