"Buy crypto if you want to lose" Seriously? Sounds like an Internet warning from 2000.
You know which warning I have in mind? This one:
Seems that history is repeating itself. This time, Bank of England Governor Andrew Bailey when asked about the rising value of cryptocurrencies, said:
“They have no intrinsic value. I’m going to say this very bluntly again,”
“Buy them only if you’re prepared to lose all your money.”
Bailey’s comments echoed a similar warning from the U.K.‘s Financial Conduct Authority.
“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,”
the financial services watchdog said in January.
“If consumers invest in these types of product, they should be prepared to lose all their money.”
Bailey, who was formerly the chief executive of the FCA, has long been a skeptic of crypto. In 2017, he warned:
“If you want to invest in bitcoin, be prepared to lose all your money.”
And how Bitcoin is responding? Well, it is up over 90% this year, thanks in part to rising interest from institutional investors and corporate buyers such as Tesla. The electric car firm bought $1.5 billion worth of bitcoin earlier this year, and the value of its holdings have since risen to nearly $2.5 billion.
Alternative digital currencies have made even larger gains than bitcoin. Ether, 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%.
With Dogecoin I agree to some extent that it's rise can be attributed to tweets from celebrities like Tesla's Elon Musk and Mark Cuban, as well as retail investors buying the token on the free-trading app Robinhood. David Kimberley, an analyst at U.K. investing app Freetrade, described the dogecoin rally as
“a classic example of greater fool theory at play,”
referring to the practice of selling overvalued assets to investors who are willing to pay a higher price.
Funny is that at the same time, central banks are considering whether to issue their own digital currencies. Last month, the Bank of England launched a joint taskforce with the Treasury aimed at exploring central bank digital currencies, or CBDCs. Such a currency would exist alongside cash and bank deposits rather than replacing them, the bank said.
Source CNBC, with my private comments :)