• According to European Central Bank President Christine Lagarde, the crypto market is highly speculative and dangerous to people who do not know the risk involved.

• Last year, the deputy governor of the Bank of England, Sir Jon Cunliffe, made a similar assertion, stating that Bitcoin could become worthless.

Crypto has faced a series of criticism from financial experts and analysts since going mainstream. It is highly argued that the digital asset is worthless, and thrives purely on speculation. The latest criticism comes from the European Central Bank President Christine Lagarde. In an interview on a Dutch television show College Tour, she stated that cryptos are based on nothing. According to her, the market is highly speculative and dangerous to people who do not know the risk involved. It is, therefore, important to regulate them to prevent people from losing their funds.

My very humble assessment is that it is worth nothing, it is based on nothing, and there is no underlying asset to act as an anchor of safety. The day when we have the central bank digital currency out, any digital euro, I will guarantee — so the central bank will be behind it and I think it’s vastly different from many of those things.

In the statement, she disclosed that she had never invested in crypto. However, her son has done so with little luck. Concerning the rising inflation rate, Lagarde disclosed that the interest rate could be hiked to control it. 

Fundstrat’s Tom Lee thinks crypto should be seen as a digital business

Last year, the deputy governor of the Bank of England, Sir Jon Cunliffe, made a similar assertion, stating that Bitcoin could become worthless. In a statement, he cautioned that banks should be prepared for possible risks that may arise from the rapid growth in popularity of the crypto market. According to him, the price of crypto can vary considerably and can practically drop to zero. 

Thomas Belsham, a worker at the Bank’s stakeholder and media engagement division, also believes that the problem with Bitcoin lies in the fact that it is not used to price anything apart from itself. He stated that investors are hooked to Bitcoin because of its scarcity, but this may even render it useless.

According to the Bank of England, institutions must take a cautious approach in their bitcoin adoption.

Enhanced regulatory and law enforcement frameworks, both domestically and at a global level, are needed to influence developments in these fast-growing markets to manage risks, encourage sustainable innovation, and maintain broader trust and integrity in the financial system.

Tom Lee, head of research at Fundstrat Global Advisors previously stated it is better to see Bitcoin as a digital business. He explained that just as it is difficult to justify the value of any digital business, so are the likes of Facebook, Google, Apple, etc built on trust. 

Anyone who thinks digital gold isn’t a store of value is overlooking the fact that most businesses today are built around digital trust, including the financial system.

Related: Cryptocurrency doesn’t add to society; I don’t own any – Bill Gates