Bitcoin could collapse and is not a good safeguard of value, warn global central bankers

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It’s a historic week for bitcoin, but it hasn’t stopped global central bankers from issuing a series of warnings about the utility and inherent volatility of crypto assets.

RiksbankGov. Stefan Ingves said doubts remain about the sustainability of bitcoin BTCUSD, + 0.50%, the world’s largest digital asset, if it is not backed by the government.

Private money usually collapses sooner or later, Ingves said at a banking conference in Stockholm recently.

The central banker said regulatory oversight over crypto, including bitcoin and Ether ETHUSD, + 0.93% of trading on the Ethereum blockchain, will likely increase as the popularity of digital assets increases.

Meanwhile, Bank of Mexico Governor Alejandro Diaz de Leon said separately on Thursday that bitcoin is a barter tool rather than legal tender and described it as a small store of value, citing its fluctuations in crazy prices.

Anyone who receives bitcoin in exchange for a good or a service, we think it is more akin to bartering, because that person is exchanging a good for a good, but not really money for a good, has said Diaz de Leon, as quoted by Reuters.

People will not want their purchasing power, their salary to go up or down by 10% overnight. You don’t want this volatility for purchasing power. In that sense, it’s not a good safeguard of value, the Mexican central banker said.

His comments come after bitcoin officially became legal tender in El Salvador, which was seen by many enthusiasts as a turning point for crypto.

Read: Bitcoin experiment in El Salvador divides crypto community amid steep price drop

Discover: Bitcoin Day in El Salvador ushers in the promise and peril of crypto

However, this moment did not dull the choppy trading that has become associated with bitcoin and its ilk.

Bitcoin hit a short-term peak of $ 53,000 on Monday, but preceded an intrasessional nadir of around $ 43,000 on Tuesday, according to CoinDesk.

Diaz de Leons said Mexico would not seek to adopt cryptography similar to El Salvador, given what he described as its flaws.

Bitcoin changed hands on Thursday at $ 46,696.80 on CoinDesk, up 0.9% but well below its recent high, while Ether traded at $ 3,471.13, down 1 , 1%.

Stocks were also trading under pressure, with the Dow Jones Industrial Average DJIA, -0.43%, the S&P 500 SPX, -0.46% and the Nasdaq Composite COMP indices, -0.25% all ending lower. .

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