England’s central bank warns crypto investors to be wary of the risks associated with buying cryptocurrencies.
Andrew Bailey, governor of the Bank of England has warned crypto investors of the dangers of participating in the market.
Speaking during a conference on Thursday, Bailey balked at the notion of “cryptocurrencies,” stating that “crypto assets” was a more suitable nomenclature for describing virtual currencies.
The BoE governor espoused well-worn anti-crypto rhetoric, specifically the argument that cryptocurrencies lacked intrinsic value. “I would only emphasise what I’ve said quite a few times in recent years [and] I’m afraid they have no intrinsic value,” Bailey added.
Delivering his stark warning to crypto investors, Bailey said:
“I’m sorry, I’m going to say this very bluntly again: buy them only if you’re prepared to lose all your money.”
The BoE governor’s remarks bear a close resemblance to statements issued by the United Kingdom’s Financial Conduct Authority. As previously reported by Cointelegraph, the FCA warned the British public of the risk of incurring huge losses from crypto investments back in January.
At the time, the crypto market was in the throes of a significant correction as Bitcoin (BTC) dipped below $33,000. Since then, the total crypto market capitalization has grown almost three-fold and is currently above $2.3 trillion.
Bailey’s comments are coming amid a massive spike in crypto prices especially for altcoins with Ether (ETH) setting a new all-time high. Major alts like Polkadot (DOT), Chainlink (LINK), and XRP have also seen vertical price actions.
The BoE governor touched on the current mania despite the apparent lack of intrinsic value, adding: “Now that doesn’t mean to say people don’t put value on them, because they can have extrinsic value.”
Indeed, Dogecoin (DOGE), arguably the quintessential “meme coin” is up more than 12,700% year-to-date.
While the BoE governor might not think much of the value proposition of crypto, the country’s tax authority is not neglecting the possibility of using valuable virtual currencies being used to evade taxes.
Back in April, Her Majesty’s Revenue and Customs announced plans to upscale its policing of would-be cryptocurrency tax evaders in a manner reminiscent of the United States Internal Revenue Service’s “crypto question.”