Andrew Bailey, Bank of England (BoE) Governor, has once again dismissed Bitcoin’s superiority status as he finds it hard to see BTC’s intrinsic value.
Bailey doubts BTC’s intrinsic value
The Bank of England conducted a question and answer meeting with members of the public on October 12. Here, Bailey explained that he finds it hard to see Bitcoin’s intrinsic value or the perceived worth determined through fundamental analysis.
I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,…It may have extrinsic value in the sense that people want it.
Intrinsic value is generally an investor’s insight of the asset’s value. Whether Bitcoin does or does not have it depends entirely on the perspective of a potential investor. Moreover, Bailey’s position on crypto apparently has not changed despite the COVID19 pandemic situation.
He also made an immediate caution for using Bitcoin as a means of payment because it made him feel very nervous. In particular, he pointed out the volatility of crypto prices in the market.
However, Bitcoin is the first cryptocurrency invented by Satoshi Nakamoto. Analysts have been predicting that its market cap will reach trillions within 5-10 years. This is in line with the bullish indicators it has been showing for 2021.
According to Coingecko, Bitcoin’s price is changing hands at $11,474 with a 24-hour volume of 22.03 billion, at the time of writing. Yet, BTC search interest has been reducing in the UK.
Bailey’s previous views on Bitcoin
Bailey had previously expressed his views on Bitcoin. During a Brookings Institute virtual conference, he stressed that crypto assets are just unsuited to the world of payments. Considering that many retail users don’t have a clear understanding of cryptocurrencies yet.
Bailey showed himself reluctant to believe crypto assets are a proper investment opportunity because their value can fluctuate quite widely. However, when it comes to stablecoins, he commented that it might offer some useful benefits. It should meet standards that are presently applied to British banks.
If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them.
In March, Bailey told members of the Parliament at a Treasury Select Committee hearing that investors should “be prepared to lose all [their] money” as the crypto asset holds no intrinsic value.
British CBDC on the works
Following this, the Bank of England joined other central banks from Canada, Europe, Switzerland, Japan, and the USA to partner on a report stating how the CBDCs of each nation could coexist with and complement existing forms of money to develop innovation and efficiency.