“Get ready to lose all your money”: A stern warning from the central bank to those who have invested in cryptocurrency

Andrew Bailey – Reuters

Faced with the brutal fall of the cryptocurrency markets, the governor of the Bank of England doubled down on the warning that citizens should prepare for significant losses if they decide to invest in digital assets.

If they want to invest in these assets, that’s fine. But be prepared to lose all your money,” Andrew Bailey told lawmakers in London.

“People may still want to buy them because they have extrinsic value (…) People value things for personal reasons. But they do not have intrinsic value. This morning we saw another explosion on the cryptocurrency exchange,” the BoE chief told members of the Public Accounts Committee.

Billy spoke after the cryptocurrency lender percentage grid It said it had frozen withdrawals, trades and transfers between accounts due to “extreme market conditions.”

percentage grid
percentage grid

This decision has shaken investor confidence in the stability of cryptocurrency markets, which was already shaken in May, when the collapse of the algorithm currency TerraUSD and its sister currency Luna caused prices to crash.

In fact, a similar crash occurred in the cryptocurrency yesterday, with the price of Bitcoin dropping to an 18-month low.

The percentage move came on top of a slip that was fueled by a surprise US inflation reading for May, which prompted investors to flee riskier assets.

On Tuesday, Bitcoin lost another 10% from the previous day to trade at $22,134, according to data from CoinMarketCap. Other coins were feeling the pinch, with Ether, Cardano, Solana, and Dogecoin dropping.

The British official has long been skeptical of cryptocurrencies, describing them last year as “dangerous” to the general public.

More inflation

As head of the Bank of England, he himself has come under fire after warning of “appalling” food price hikes, and said workers should not seek wage increases as they could exacerbate inflationary pressures in the UK.

In May, inflation reached 9% in Great Britain, the highest level since 1982, according to data from the Office for National Statistics (ONS).

Bank of England - REUTERS/Toby Melville/file photo
Bank of England – REUTERS/Toby Melville/file photo

The rise in inflation responded to the increase in the prices of goods and services for daily use during the month of April, driven by the war in Ukraine, and mainly to the unprecedented 54% increase in the price ceiling for energy products, which came into effect at the beginning of the month.

ONS Chief Economist Grant Fitzner noted today that “inflation rose sharply in April, driven by a sharp rise in electricity and gas prices at the same time that this cap began to apply to prices.

This new cap, which sets the maximum unit price that suppliers can charge consumers, came into effect in April, causing average annual increases in homes for gas and electricity of around €2,000.

After the release of the new inflation data, Britain’s Chancellor of the Exchequer, Rishi Sunak, said that although the government could not “fully protect citizens” from the global problems that had contributed to this rate reaching 9%, they were “substantial support” and “on the Ready to take further action.

To contain rising inflation, the Bank of England recently raised interest rates in the UK from 0.75% to 1%, its highest level in 13 years.

This was the fourth consecutive increase for the entity in an attempt by the English Issuing Bank to counter the rise in the cost of living in the UK.

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