Bitcoin is decried “Zero Value”
“Bitcoin is a multi-level model,” “unreliable,” and “worthless” are the comments made by some top officials and financial experts.
The above comments appeared at the 2022 World Economic Forum (WEF), which took place in Davos (Switzerland) from May 22 to 26, amid recent sharp fluctuations in Terra Luna and UST amounts.
Bitcoin is multi-level model
Kristalina Georgieva, Director of the International Monetary Fund (IMF), compared several cryptocurrencies with multi-level pyramid models.
“When someone promises you a 20% return on something that’s not committed to any real asset, what do we call it?” she questions Terra’s model of sending Luna and UST for 20% interest. “I call it a pyramid, a pyramid model in the digital age.”
According to Ms. Georgieva, Bitcoin can be seen as a valuable coin, but it cannot be called money because the prerequisite for something called money is that it must keep its value stable.
Ms. Georgieva also noted that some digital currencies would have a particular value with different levels of risk. She said, for example, that the digital currencies issued by the central bank would be valuable since the state supports them. “It deserves the name stablecoin because assets support it on a 1-1 basis,” the IMF chief stressed.
She warns users that the money is not getting the support of the regulators. “The less support you have for the money, the more you should be prepared to take the risk to come,” she said.
Ms. Georgieva said that digital money should not be given up altogether despite her objections. Instead, they should be managed and knowledge of them more commonly deployed in order to keep people from investing blindly.
Bitcoin is null
Replying to the Dutch broadcaster on May 22, Christine Lagarde, President of the European Central Bank, insisted that the money was of no value because “it is based on nothing, no basic asset to guarantee as an anchor of safety.”
“They are speculative assets because the value changes over time,” she said. “We should call a spade a spade. An asset is an asset, it must be regulated as such, the asset management authorities must supervise it. It should not be seen as currency”.
Before that, not many experts said that the value of digital currencies like Bitcoin would “go to zero” and advised people not to invest. “I think Bitcoin is worthless, and I don’t want to say much, it doesn’t mean anything to me, “Jamie Dimon, President and CEO of JPMorgan, told CNBC. In mid-December last year, the British Central Bank representatives said that Bitcoin investors and cryptocurrencies should be prepared to lose everything.
François Villeroy de Galhau, the governor of the Bank of France, said he does not consider cryptocurrencies as assets, “no more reliable means of payment”.
According to him, for cryptocurrencies to become a currency, there must be someone responsible for the value of cryptocurrencies. Not to mention, it must be widely accepted as a means of exchange. “At the moment, things are not like that,” he said.
Commenting on the collapse of Luna and UST, Galhau believes “citizens have lost faith in cryptocurrencies.”
For investment only
According to Sethaput Suthiwartnarueput, Governor of the Central Bank of Thailand, cryptocurrencies are simply investments instead of payments.
“You want to invest in cryptocurrencies as well, but I don’t see it as a means of payment because it’s inappropriate,” he said in Davos.
The Central Bank of Thailand is also developing a digital currency. Earlier this year, the country announced a ban on using cryptocurrencies as a payment method while arguing that the widespread use of digital assets poses a threat to the Thai economy.
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