As one of the worst bearish slumps for the entire cryptocurrency industry unfolds, heads of some countries’ major financial institutions are using it as an argument against the new asset class, including the Governor of the Bank of England.
According to the Governor:
“Crypto assets have no intrinsic value. This morning, we have seen another blow-up in a crypto exchange.”
The blow-up that the Governor was talking about referred to the most recent decline of the crypto market, during which its total capitalization dropped by around 12%, to below the $1 trillion mark in just a few hours. Only three months earlier, the market had managed to reclaim the $2 trillion mark.
In the meantime, the price of the market’s flagship digital asset – Bitcoin (BTC) – also suffered a dramatic blow, trading at press time at $22,174, a 6.60% drop on the day and a 24.82% decline across the previous week, according to CoinMarketCap data.
The Governor also said that anyone willing to invest in cryptocurrencies should be prepared to lose all their money, adding that artificial intelligence (AI) tools could be used to create automatic controls on suspicious assets. Finally, he said that there were plenty of bad actors in the crypto industry and that AI could help weed them out.
Bank of England versus crypto
It is worth noting that this attitude is nothing new for the U.K.’s central bank, which has previously cautioned against using crypto. For instance, in mid-May, Finbold reported on Bank of England Deputy Governor Jon Cunliffe’s warnings to “move out of risky assets” like crypto.
Earlier, in April, the Bank of England had also requested a 9% increase in fees from firms in the City of London in order to fund research into emerging risks associated with, among other things, cryptocurrencies.
Finally, back in December 2021, the U.K. central bank also labeled Bitcoin “worthless”, adding that anyone who invests in it should be prepared to lose all of their investments, while Cunliffe warned that the rapid growth of crypto could pose a serious threat to the established financial system in the country.