When the price of Bitcoin (BTC) rose sharply, the Governor of the Central Bank of Ireland expressed concern about investing in cryptocurrencies. Gabriel Makhlouf, who is also the director of the European Central Bank, warned the public this Friday about the risks of investing in cryptocurrency on Bloomberg TV.
The Central Bank Governor specifically mentioned the January 11 warning from the British Financial Conduct Authority:“As the U.K. authority said a few weeks ago […] if people want to invest in Bitcoin they’ve got to be prepared to lose all their money. That’s certainly my view.“
According to Makhlouf, consumer protection is the most important task facing local regulators today as investors are clearly considering using cryptocurrencies like Bitcoin as an asset. Despite increasing attention to consumer protection, Makhlouf seems confident that cryptocurrencies like Bitcoin pose no threat to global financial stability:
“Personally, I’m not sure why people are investing in this type of asset, but they clearly see it as an asset and an investment. Our job is to keep consumers safe. I think this is the most important. Currently, I see I don’t have the financial stability problems that Bitcoin itself brings. I’m more concerned that consumers are making the right decisions. ”
Irish Central Bank Governor advised global regulators to tighten rules on cryptocurrencies
Some key members of the crypto community are skeptical of Makhlouf’s statement. Mike Novogratz, founder and CEO of Galaxy Digital, believes that non-leveraged Bitcoin investments are not as risky as the central bank implies.
“I am sick of this type commentary. It’s just not true. Yes it’s a 100% vol asset and if you buy with leverage it’s very risky. But unlevered you will NOT lose all your money. $BTC is a macro asset. Repeat 100 times. It will be around for a long, long time.”
Makhlouf’s speech echoed the speech by European Central Bank President Christine Lagarde, who urged global regulators to tighten rules on cryptocurrencies on Jan. 13, calling Bitcoin “interesting business”. At the time of publication, Bitcoin was trading at $37,338, up approximately 18% over the past 24 hours.