Riksbank chief: private money will “collapse” sooner or later
The head of Sveriges Riksbank Stefan Ingves said that there will always be doubts about the continued existence of leading cryptocurrency Bitcoin as long as it is not backed by the government.
Sweden’s Riksbank is the oldest central bank in the world and the fourth oldest bank ever. Its chief executive told a banking conference in Stockholm that private money will usually collapse sooner or later. He added that regulatory control of Bitcoin, Ethereum and other cryptocurrencies will increase with the popularity of digital assets.
Yesterday, the head of Mexico’s central bank Alejandro Diaz de Leon was quoted by Reuters criticizing Bitcoin. In his opinion, Bitcoin does not protect assets. It is more of a “medium of exchange” than a legal tender. Diaz criticized the volatility of the digital currency, he said.
When Bitcoin is used to pay for a good or service, it is more of a barter transaction. This is because a person is exchanging one good for another good, but not actually money for a good. People don’t want their purchasing power, their salary to go up or down 10% from one day to the next. They don’t want that volatility of purchasing power. In that sense, it’s not good asset protection.
He made this statement after El Salvador officially recognized Bitcoin as legal tender. This event was seen by many enthusiasts as a turning point for digital assets. Nevertheless, it seems to have failed to mitigate the volatile trading associated with bitcoin and altcoins. Diaz de Leon added that Mexico will definitely not follow in El Salvador’s footsteps given these shortcomings.
No immediate trigger for sudden drop
After reaching a high of $53,000 on Monday, Bitcoin crashed, losing as much as $10,000 in value. According to experts, there was no immediate trigger for the sudden rckgang or the peak. However, investors pointed out that Coinbase, the largest crypto exchange in the U.S., had reported problems with trading volume.
Weak trading on Thursday
Bitcoin traded at $46,696.80 on CoinDesk on Thursday, up 0.9%. Ethereum paid $3,471.13, down 1.1%. The Dow Jones Industrial Average, Nasdaq Composite and S&P 500 all closed lower.