BOK’s chief executive claimed that Bitcoin and other cryptocurrencies have no intrinsic value while predicting that the high price fluctuations will remain.
The head of the Bank of Korea, Lee Ju-yeol, said that Bitcoin and other major cryptocurrencies lack intrinsic value. However, he believes that all assets will continue to experience significant price fluctuations. The Chief of the Bank of Korea said Bitcoin and other cryptocurrencies, do not possess inherent value. In a recent news report, Lee Ju-yeol blasted the highly volatile nature of the digital asset industry.
“There is no intrinsic value in crypto assets,” said BOK Gov. Lee Ju-yeol at a parliamentary session on 23 February.
The news report quoted lawmakers asking BOK’s chief if the recent surge in the price of BTC is temporary or not.
“It is very difficult to predict the price, but its price will be extremely volatile,” Ju-yeol added.
The bank executive has also said that the recent rally in Bitcoin’s price followed by other significant digital assets may be led by multiple factors. Among them, Elon Musk’s Tesla – investing $1.5 billion. He highlighted that the latest price surge might be a continuation of institutional investors using Bitcoin as a hedge.
Ju-yeol also emphasized that BOK shouldn’t buy bonds issued by the country’s government directly. Otherwise, this would raise worries about fiscal stability and undermine the central bank’s trust.
Bitcoin Fall Out
Bitcoin and other cryptocurrency volatility, has been staring up troubles for both retail and institutional investors. This notable characteristic of the digital assets has been a stumbling block for investors, thus, causing some hesitations in whether to allocate funds in it or not. BTC’s price managed to initiate another notable surge during the last couple of months, marking a consequent all-time high.
Recently, it skyrocketed above $58,000, while leaving other Altcoins such as Ethereum, Bitcoin Cash behind. However, almost immediately after its upgrowth, BTC suffered a significant correction, settling unsteadily around $50K as per the time of the writing. As a result, the cryptocurrency market capitalization lost more than $300 billion in two days.
Interestingly enough, JPMorgan strategists said recently that Bitcoin’s illiquidity could bring more problems. Analysts from the US multinational banking institution argued that BTC is in a liquidity shortage, warning investors that the primary crypto-asset could suffer another price drop.
