People should only buy cryptocurrencies if they are prepared to lose all their money, the governor of the Bank of England has said in the wake of breakneck rallies in assets such as bitcoin, ether, and dogecoin.
Andrew Bailey told journalists following the central bank’s interest rate decision on Thursday that he thinks cryptocurrencies such as bitcoin have no value in their own right.
“I would only emphasise what I’ve said quite a few times in recent years. I’m afraid they have no intrinsic value,” he said.
“Now that doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.”
Bailey added: “I’m sorry, I’m going to say this very bluntly again: buy them only if you’re prepared to lose all your money.”
The Bank of England governor’s comments came during a red-hot rally in dogecoin – a digital token created as a joke in 2013.
Dogecoin has soared more than 20,000% over the last year, boosted by celebrity endorsements and social-media buzz.
Cryptocurrency advocates argue that the assets can act as a sort of digital gold that offers investors a safe store of value and protection against inflation. Others argue that cryptocurrencies can become more efficient global payments networks than the current systems of foreign exchange.
But Bailey was skeptical. He said he does not believe cryptocurrencies are truly currencies, saying: “I’m afraid currency and crypto are two words that don’t go together for me.” Bailey’s comments echoed the message from the UK’s Financial Conduct Authority earlier in the year.
Despite his words of warning, the Bank of England governor said he does not see any signs of volatility in assets that could cause problems for financial stability as a whole.
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