Cryptocurrencies investors should be prepared to lose all their money

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Cryptocurrencies investors should be prepared to lose all their money
Bank of England (BOE) Governor Andrew Bailey said that Cryptocurrencies “have no intrinsic value” and people who invest in them should be prepared to lose all their money.
Currencies like bitcoin, Ethereum and or even Dogecoin have been on a tear this year, reminding some investors of the 2017 crypto bubble in which Bitcoin blasted toward $20,000, only to descend as low as $3,122 a year later.
In Bailey’s idea they have no intrinsic value. This doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.
Investing in Cryptocurrencies , or investments and lending linked to them, usually involves high risks with investors. So, yes if you want to invest in these types of products, you should be prepared to lose all your money.
Bitcoin is up over 90% so far in this year, to rising interest from institutional investors and corporate buyers such as Tesla. This electric car company bought $1.5 billion worth of Bitcoin earlier this year, and the value of its holdings have since raised to nearly $2.5 billion.
Bitcoin’s fans see it as a store of value dependent to gold because of its rare supply , as you know only 21 million Bitcoins can ever be minted, arguing that the cryptocurrency can act as a hedge against inflation as central banks around the world print money to relieve coronavirus-battered economies.
Pessimists view Bitcoin as a market bubble waiting to burst. Michael Hartnett, chief investment strategist at Bank of America Securities, said bitcoin’s round up looks like the “mother of all bubbles,” while Alvine Capital’s Stephen Isaacs believes there are “no fundamentals with this product, period.”
Meantime, alternative digital currencies have made even larger gains than Bitcoin. Ethereum, the native token of the Ethereum blockchain, has seen returns of more than 360% year-to-date, while meme-inspired crypto dogecoin is up a whopping 12,500%.
Analysts have accredited Dogecoins rise to tweets from celebrities like Elon Musk and Mark Cuban, as well as small investors buying the token on the free-trading app Robinhood.
At the same time, central banks are thinking whether they should issue their own digital currencies or not .
At last month, the Bank of England launched a joint task force with the Treasury goaled at exploring central bank digital currencies, or CBDCs. This bank believes that such a currency would exist alongside cash and bank deposits rather than replacing them.

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