Bitcoin could collapse and isn’t ‘a good safeguard of value,’ warn global central bankers
It’s a historic week for bitcoin, but that hasn’t stopped global central bankers from issuing a round of warnings about the utility and inherent volatility of crypto assets.
Riksbank Gov. Stefan Ingves said that doubts remain about the staying power of bitcoin BTCUSD,
“Private money usually collapses sooner or later,” Ingves said at a banking conference in Stockholm recently.
The central banker said that regulatory scrutiny on crypto, including bitcoin and Ether ETHUSD,
Meanwhile, Bank of Mexico Gov. Alejandro Diaz de Leon on Thursday separately said that bitcoin is a tool for barter rather than legal tender and described it as a poor store of value, citing its wild price swings.
“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,” Reuters quoted Diaz de Leon as saying.
“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,” the Mexican central banker said.
His comments come after bitcoin formally became legal tender in El Salvador, which has been viewed by many enthusiasts as a watershed moment for crypto.
Read: El Salvador’s bitcoin experiment splits crypto community amid major price decline
Check out: ‘Bitcoin Day’ in El Salvador ushers in the promise and peril of crypto
However, that moment failed to dull the choppy trade that has come to be associated with bitcoin and its ilk.
Bitcoin hit a near-term peak of $53,000 on Monday but preceded to tumble to an intrasession nadir on Tuesday at around $43,000, according to CoinDesk.
Diaz de Leon said that Mexico wouldn’t be seeking to adopt crypto similar to El Salvador, given what he described as its flaws.
On Thursday, bitcoin was changing hands at $46,696.80 on CoinDesk, up 0.9% but well off its recent peak, while Ether was trading at $3,471.13, down 1.1%.
Stocks were also trading under pressure, with the Dow Jones Industrial Average DJIA,
