Hello and welcome to the Overbit Insights for this week.
Our first story of the day is on some stark words out of the Bank of England (BOE) regarding cryptocurrency. According to Bank of England Governor Andrew Bailey, cryptocurrency investors should expect to lose all of their money. Bailey went on to say that cryptocurrencies "have no inherent value," and those who invest in them should expect to lose all of their money.
Bitcoin, ether, and even dogecoin have been on a roll this year, reminding some investors of the 2017 crypto bubble, when bitcoin soared to $20,000 before plummeting to as low as $3,122 a year later. When asked about the increasing value of cryptocurrencies at a press conference on Thursday, Bailey said: "They have no intrinsic value. That doesn't mean to say people don't put a value on them because they can have extrinsic value. But they have no intrinsic value."
"Buy them only if you're prepared to lose all your money." These comments of Bailey's echoed a similar warning from the UK's Financial Conduct Authority.
"Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors' money," the financial services watchdog said in January. "If consumers invest in these types of products, they should be prepared to lose all their money."
Bailey, who was formerly the FCA's chief executive, has long been a sceptic of cryptocurrency. In 2017, he issued the eerily-similar warning: "If you want to invest in bitcoin, be prepared to lose all your money."
The following story is again related to regulators' disapproval of Bitcoin. According to Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), Bitcoin Is a 'speculative' and volatile store of value. Gensler didn't stop at bitcoin, adding that "many crypto tokens — I won't call them cryptocurrencies for this moment — are indeed securities."
Yesterday, Gensler told lawmakers that crypto investors are currently not protected when trading on exchanges. "There's a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction," Gensler said, clarifying that BTC does not fall under this umbrella, as it is considered a commodity and not a security.
According to the US Department of the Treasury, Michael J. Hsu will take over as Acting Comptroller of the Currency on May 10. Before joining the US Office of the Comptroller of the Currency, Hsu worked at the Federal Reserve Board of Governors as an Associate Director in the Division of Supervision and Regulation.
Based on a US Federal Reserve poll, one-fifth of respondents believe cryptocurrency is a threat to financial stability. Cryptocurrencies were also ranked low on the list of risks, ranking ninth out of a total of 14 possible concerns. Just 24 people responded to the survey, ranging from brokerage firms and investors to political consultants and academics.
Even if some people dislike it, it is clear that Bitcoin is here to stay. Bitcoin is up over 90% year-to-date, thanks in part to rising interest from institutional investors and corporate buyers such as Tesla.
On top of that, we see payments companies like Square more than triple their quarterly revenue thanks in large part to Bitcoin's brisk popularity, according to Bloomberg. Their Bitcoin revenue grew elevenfold, from USD 306 million to USD 3.51 billion. Things can always change in the fast moving-world of crypto, but its rise in popularity certainly doesn't seem to be a trend to bet against.
That's it for this week's Overbit Insights. As always, thanks for taking a read and don't forget to be back next time.