Sweden's central bank governor talks crypto collapse: Bitcoin is like 'trading in stamps'
(Kitco News) A new warning of a potential crypto collapse comes from Sweden's central bank governor, who compared trading bitcoin to "trading in stamps."
"Private money usually collapses sooner or later," Sweden's Riksbank Governor Stefan Ingves said at a Swedish banking conference last week. "And sure, you can get rich by trading in bitcoin, but it's comparable to trading in stamps."
Ingves already stated earlier this year that cryptocurrencies will face regulatory oversight when they become more mainstream.
Ingves joins other central bank governors who question the crypto space. In May, Bank of England governor Andrew Bailey said that cryptocurrencies could crash to zero, adding that they have no intrinsic value.
"I'm afraid they have no intrinsic value. Now that doesn't mean to say people don't put value on them, because they can have extrinsic value. But they have no intrinsic value," 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."
In February, Ireland's central bank governor Gabriel Makhlouf said that investors who choose to buy bitcoin should be ready to lose everything they put into the cryptocurrency.
"Personally, I wouldn't put my money into it, but clearly, some people think it's a good bet," Makhlouf said. "Three hundred years ago, people put money into tulips because they thought it was an investment."
The Federal Reserve Chair Jerome Powell also commented on the popularity of bitcoin back in February, referring to the cryptocurrency as a speculative investment only.
"What people call cryptocurrencies, they're really vehicles for speculation. No one is using them for payments, for example, like the dollar," Powell said interview with The Economic Club of New York.
Powell also compared bitcoin to gold: "For thousands of years, human beings have given gold a special value that it doesn't have," he said. "Nonetheless, for thousands of years, they have done that." He added that bitcoin and other cryptocurrencies "are much more like that … They're not really being actively used as payment."
Around the same time, U.S. Treasury Secretary Janet Yellen called bitcoin a "highly speculative asset" back in February, adding that bitcoin is not "widely used as a transmission mechanism" and is an "extremely inefficient way of conducting transactions."
The Fed and other central banks around the world are working on their own digital currencies known as CBDCs. The Fed said that it would be releasing a research paper soon, looking into the pros and cons of the initiative.