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 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 (above $400bln) and Bitcoin (above $1tln).
For example, , 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:) is considering setting up crypto services due to client interest. Meanwhile CNBC has reported that Goldman Sachs (NYSE:) 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.
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