Bank of England Governor’s Crypto Warning – Be Prepared to Lose All Your Money

Summary

  • Andrew Bailey, Bank of England’s governor, has warned investors to be prepared to lose money if they invest in Dogecoin.
  • Dogecoin has made an astronomical rise in the past twelve months, particularly since the start of 2021.
  • The meme coin’s growth has invariably correlated with tweets by Tesla Founder Elon Musk, who has been an avid, long time Dogecoin supporter.

Crypto investors were issued a sobering warning yesterday when the governor of the Bank of England made blunt comments regarding the emerging asset class.

Source: © Fazon1| Megapixl.com

Andrew Bailey pulled no punches in his rebuttal following queries about whether the Bank of England was troubled by the wild swings cryptocurrency had experienced over the last six months.

Bailey’s response was swift and to the point, saying that although people currently value them based on their apparent extrinsic value, in reality, cryptocurrency does not have any real intrinsic value.

He concluded his scathing analysis by advising people to purchase crypto only if they are prepared to lose it.

Bailey’s comments seem akin to advise one would give a person planning to spend a night at a roulette table, and in some ways, the rather perilous advice is not necessarily ill-advised.

Dogecoin’s fun but volatile

The meme-based crypto – Dogecoin (DOGE)  which was launched less than a decade ago to satirise other more established cryptos, has made astronomical value rises in the past twelve months, particularly since the beginning of 2021.

In January of this year, the crypto – inspired by the Japanese dog breed Shiba Inu – was valued at barely US$0.01 per coin. Today, that price is just shy of US$0.59 – a rise of around 5,900%. The meteoric ascension has resulted in Dogecoin being the fourth-largest cryptocurrency with a market cap of more than US$70 billion.

It is rises such as this that are attracting opportunists far and wide and understandably so. Asset classes with a rate of seven per cent have traditionally been seen as a solid investment whether these rates are achieved by building a business, investing in the traditional stock market or, most commonly and arguably most reliably, by investing in bricks and mortar.

On the other hand, Dogecoin has gained 20,000% of value in the last year, which begs the question: How?

The answer is to this question validates Governor Bailey’s concerns and consequent warning to investors hoping to hop aboard the “DogeTrain”.

It does not take much to boost Dogecoin’s value

The dramatic increases in Dogecoin’s value experienced in 2021, in particular, has correlated with Twitter posts from Tech Entrepreneur, Tesla (NASDAQ:TSLA) Founder, SpaceX CEO, and real-life Marvel Iron Man Elon Musk.

Source: © Salarko | Megapixl.com

And although there’s some wisdom and truth in the adage that correlation doesn’t necessarily equate to causation, Musk’s tweets and Dogecoin’s subsequent rise has generated reports that the US regulatory body, The Securities and Exchange Commission (SEC), has investigated Musk for possibly unfairly manipulating the market. Musk has since downplayed those reports claiming his Dogecoin-related Tweets are simply jokes.

ALSO READ: Dogecoin Surge Leads to Robinhood Crash as Investors Left Feeling Robbed  


Disclaimer
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.