Singapore's central bank 'frowns on crypto,' warns of 'significant losses' as bitcoin and ethereum scale record bull rallies
(Kitco News) The Monetary Authority of Singapore (MAS) has issued a warning to retail investors embracing crypto assets, stating there is a risk of "significant losses."
Singapore's central bank "frowns on cryptocurrencies or tokens as an investment asset for retail investors," MAS managing director Ravi Menon said at the Singapore Fintech Festival.
Significant rallies can be followed by violent pullbacks. "The prices of crypto tokens are not anchored on any economic fundamentals and are subject to sharp speculative swings," Menon said. "Investors in these tokens are at risk of suffering significant losses."
Overnight, bitcoin and ethereum hit new record highs, with the former touching $68,525.84 and the latter hitting $4,839.92. Year-to-date, bitcoin is up more than 130% and ethereum is up 550%.
The record inflows into bitcoin products and funds reveal the power of the current rally. Data from digital asset manager CoinShares points to a record $6.4 billion transferred year-to-date. Last week alone, bitcoin inflows totaled $95 million.
This year, both cryptocurrencies saw some wild price swings, with the biggest pullback registered in May after Tesla and SpaceX CEO Elon Musk announced that Tesla would no longer accept bitcoin as payment for its vehicles.
More central banks are speaking out about the risks involved with cryptocurrencies as the space's combined market cap hits $3 trillion.
Bank of England Governor Andrew Bailey pointed out that the popularity surge of crypto assets is boosting illegal activity.
"I'm afraid that the advent of digital means of payment, and in particular crypto assets, I'm afraid that the evidence suggests, and we see this, is that it is providing another means of payment for people who want to conduct criminal activity," Bailey said on Monday.
Over the weekend, Bank of Canada (BoC) Governor Tiff Macklem stated that bitcoin "is not a digital currency," adding that "people do not use bitcoin, to buy things."