December 11, 2023

Bank of England Governor Warns of Dangers of Cryptocurrency Investments

The Central Bank of England has warned cryptocurrency investors that buying cryptocurrencies is riskya business.

Andrew Bailey, Governor of the Bank of England, warned investors about the dangers of the cryptocurrency market.

Speaking at a conference on Thursday, Bailey ditched the word "cryptocurrencies", saying that "cryptocurrency assets" is a more appropriate expression to describe digital currencies.

The head of the Bank of England has reproduced a pretty battered anti-crypto rhetoric, in particular the argument that cryptocurrencies have no intrinsic value.

“I would like to draw your attention to what I have said many times in recent years: I am afraid that they have no intrinsic value,” Bailey announced.

Patronizing cryptocurrency investors with an exaggeratedly harsh warning, Bailey stated:

"I'm sorry, but I'll put it very bluntly again: only buy them if you're willing to lose all your money."

The horror stories of the Bank of England governor are very similar.on a statement previously released by the United Kingdom's Financial Conduct Authority (FCA). As previously reported, the FCA warned the British public in January of the risk of huge losses from cryptocurrency investments.

Then the cryptocurrency market was in powersignificant correction, during which bitcoin (BTC) fell below $ 33,000.Since then, the total capitalization of the cryptocurrency market has almost tripled and now exceeds $ 2.3 trillion.

Bailey Warned Of The Dangers Of Cryptocurrenciesinvestments amid a bullish rally in altcoins led by Ethereum (ETH), which regularly updates all-time highs. The cryptocurrency market has entered the altcoin season, which is manifested by the growth of most of the tokens in the top 100.

In his speech, the head of the Bank of England also touched upon the excitement in the cryptocurrency market. He explained that people value cryptocurrencies with no intrinsic value for their "extrinsic value":

"That doesn't mean people don't appreciate, because they canhave external value."

Perhaps he was referring to Dogecoin (DOGE), a meme-based coin that has grown by 12,700% since the beginning of the year.

Obviously, the head of the Bank of England does not have muchhigh opinion about the value of cryptocurrencies. However, this does not prevent the country's tax administration from suspecting citizens of using valuable digital currencies for tax evasion.

In April, Her Majesty's Internal Revenue and Customs (HMRC) announced its intention to take additional measures to combat cryptocurrency tax evasion.