News 8 May 2021

Bank of England governor warns against investing in cryptocurrency

8 May 2021

The governor of the Bank of England has offered a stark warning against investing in cryptocurrency in the wake of recent price surges for currencies like Dogecoin.

Talking to journalists this week, Andrew Bailey spoke negatively of the investment and told investors to prepare for the worst.

Bailey made the comments in response to the question of if the Bank of England were worried about the price swings seen in the cryptocurrency world in the last six months.

Bailey said, “I’m afraid they don’t have intrinsic value. Now that doesn’t mean to say that people don’t put value on them because they can have extrinsic value. But they have no intrinsic value. 

“So I’m going to say this very bluntly again: buy them only if you’re prepared to lose all your money.”

Similarly, the UK Financial Conduct Authority said, “Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors’ money.

“If consumers invest in these types of product, they should be prepared to lose all their money.”

The message from Bailey comes just as Dogecoin and Ethereum reached all-time highs this week in their value.

Bitcoin continues to fall behind Dogecoin with the latter rising in value 100 times faster this year.

Because of the heights in value reached this week, the combined value of all of the current cryptocurrencies is now greater than the market capital of Apple which is the world’s most valuable company.

Dogecoin’s success this week was driven by Elon Musk who referenced the cryptocurrency in his SNL skits and on Twitter.

Elon Musk told followers this week, “Cryptocurrency is promising, but please invest with caution!”