Bank of England Governor Andrew Bailey is warning people off of cryptocurrencies. He really does not like them. Yet Mark Cuban and Elon Musk are still promoting the lesser known ones like Dogecoin.
Governor Bailey expressed his opinion on the matter earlier today, Thursday, at a press conference. As an investment tool he said that a person should only, “Buy them only if you’re prepared to lose all your money.”
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“Currency and crypto are two words that don’t go together for me,” He added. Instead the BOE Governor prefers to call them “crypto assets.”
And if the people listening at the time still did not get the hint Governor Bailey added for good measure, “They have no intrinsic value.”
But wait, you say, what about all the big names in the world of business who are high on cryptocurrencies? This isn’t’ stopping Mark Cuban from pushing Dogecoin. And that digital currency has been booming since he backed it, and began accepting it for tickets for his NBA team the Dallas Mavericks. And Elon Musk is now a big investor too and is also allowing the currency to be used to purchase vehicles from his company.
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Crypto succeeds when it’s a more productive implementation of it’s competition. BTC/Gold are both financial religions. BTC is easy to trade/store/create with no delivery issues. BTC also enables transfer of value locally and globally . Gold is a hassle. Just look at Ft Knox
— Mark Cuban (@mcuban) May 2, 2021
And their actions have caused currencies like Dogecoin to spike?
But isn’t that exactly the problem here? Warren Buffet said that cryptos have been booking only because of a general fear of missing out. This is part of what drives any investment bubble. And as billionaires like Cuban and Musk buy up cryptos they make them look more attractive as investment vehicles while leaving fewer of them available for sale, thereby driving up their value.
And since big investors own such large blocks of cryptos they can cash out without warning while causing the whole market to crash.
If investors did the same thing with stocks or commodities they would get arrested. There are laws against this very type of market manipulation. But cryptocurrencies are not regulated and so someone with deep pockets or access to a lot of capital can basically do whatever he wants with them.
Why else has Bitcoin seen such huge drops after each time it hit a new high?
Then there are all of the illegal, under the table, uses of cryptocurrencies. Since they are virtual — lets face it they do not really exist — mobsters, drug dealers, and others use them all of the time. Should they become regulated and more transparent their value would certainly plummet because such people will surely stop using them.
Mark Cuban Motivational Quote
Even Mark Cuban himself has basically admitted that cryptos only have value when people like himself prop them up. He recently tweeted, “Meme coins like Doge only work if they gain utility and users use them for that utility. As long as you can spend Doge , because we know it’s annual inflation rate is set at 5b coins, it can gain SOME value as the utility grows. It becomes like any other currency…”
“Where alt coins can offer rewards to their holders because they gain revenue for the more productive service they offer, they can succeed with enough users” added Cuban. “It is VERY COMPETITIVE. Barriers to entry are minimal. Which is the risk to all participants. But rewards better solutions.”
If you are still not convinced that this is all just a big bubble based on nothing but smoke and mirrors, then see what Bill Maher said about cryptos last week on his HBO show Real time.
“Nothing with ‘crypto’ in the title ever turned out good,”he said. “There is a mania rising in the nation these days.”
Comparing cryptos to Monopoly money Maher also said, “I fully understand that our financial system isn’t perfect, but at least it’s real. Apple stock is worth money because Apple makes thousand dollar phones that everyone buys and drops in the toilet.”
“Almost all the people who tout Bitcoin, the millennials, the Gen Zers, the Silicon Valley types, are money-hungry opportunists and you’re not allowed to pretend you care about the environment,” he added.
See Bill Maher’s full anti-crypto rant here:
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