As the Bitcoin (BTC) price sees a sharp upsurge, the governor of the Central Bank of Ireland has voiced his concerns about cryptocurrency investments.
Gabriel Makhlouf, who is also a governing council member of the European Central Bank, warned the public about the risks of crypto investment on Bloomberg TV this Friday. The central banker specifically referred to a recent warning by the United Kingdom’s Financial Conduct Authority on Jan. 11:
“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 now the most important task of local regulators as investors are clearly considering cryptocurrencies like Bitcoin as assets for investment. Despite growing concerns about consumer protection, Makhlouf appeared to be confident that cryptocurrencies like Bitcoin do not pose a threat to global financial stability:
“Personally, I’m not sure why people invest in those sorts of assets, but they see them as assets clearly, and they see them as investments. Our role is to make sure that consumers are protected. I see that as the main role, I don’t see financial stability issues at the moment arising from Bitcoin itself. I worry more about consumers making the right choices.”
Some key crypto community members have taken issue with Makhlouf's statements. Founder and CEO of Galaxy Digital Mike Novogratz argued that unlevered Bitcoin investment is not as risky as the central banker implied.
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. https://t.co/U5btK5HK5V
— Mike Novogratz (@novogratz) January 29, 2021
Makhlouf’s remarks echo those of European Central Bank President Christine Lagarde, who on Jan. 13 called on global regulators to tighten rules for crypto, calling Bitcoin “funny business.”
At publishing time, Bitcoin is trading at $37,338, up around 18% over the past 24 hours.