Central banker: Bitcoin is a poor safeguard of value
Although it’s been a historic week for Bitcoin – and maybe precisely for this reason – global central bankers are eager to warn about the utilization and inherent volatility of digital assets, MarketWatch reported.
Riksbank governor: Private money ‘collapses’ sooner or later
Sveriges Riksbank Gov. Stefan Ingves said that unless it received backing from the government, doubts would always surround the staying power of Bitcoin, the world’s flagship cryptocurrency and the best-known digital asset across the globe.
The governor of Sweden’s central bank, the world’s oldest central bank and the fourth oldest bank in operation, commented that private money usually collapsed sooner or later at a banking conference in Stockholm, adding that regulatory scrutiny on Bitcoin, Ethereum, and other crypto trading would rise in parallel to the popularity of digital assets.
Yesterday, Bank of Mexico Gov. Alejandro Diaz de Leon was quoted by Reuters as saying Bitcoin was a poor store of value, calling it a “barter tool” rather than legal tender and criticizing its volatile nature.
“Whoever receives bitcoin in exchange for a good or service, we believe that is more akin to bartering because that person is exchanging a good for a good, but not really money for a good. People will not want their purchasing power, their salary to go up or down 10% from one day to another. You don’t want that volatility for purchasing power. In that sense, it is not a good safeguard of value.”
He made this statement after El Salvador officially accepted Bitcoin as legal tender, an event seen by many enthusiasts as a watershed moment for digital assets. Yet, it seems the event did not succeed in mitigating the volatile trade that has come to be associated with Bitcoin and altcoins. Diaz de Leon added that Mexico would definitely not follow in El Salvador’s footsteps considering these shortcomings.
‘No immediate catalyst’ of sudden decline
After peaking at $53,000 on Monday, Bitcoin proceeded to plummet, losing as much as $10,000 in value. According to experts, there was no immediate catalyst for the sudden decline or the peak. However, investors pointed out that Coinbase, the biggest crypto exchange in the US, had reported trading problems related to volume.
Lackluster trading on Thursday
Bitcoin was trading at $46,696.80 on CoinDesk on Thursday, up 0.9%, while Ethereum was changing hands at $3,471.13, down 1.1%. The Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500 all ended lower.