[2021-12-14] Guardian: Bitcoin could become ‘worthless’, Bank of England warns

[DooMAD]

I get the impression someone at the Guardian really isn't a fan of Bitcoin.  They do seem to enjoy publishing negative headlines fairly frequently.  Although what they've written technically isn't inaccurate, it's not particularly likely either.  People should be cautious, but that goes for anything they do with their banks and other financial companies as well.

Source:  https://www.theguardian.com/technology/2021/dec/14/bitcoin-could-become-worthless-bank-of-england-warns

The Bank of England has said that bitcoin could be “worthless” and people investing in the digital currency should be prepared to lose everything.

In a warning over the potential risks for investors, the central bank questioned whether there was any inherent worth in the most prominent digital currency, which has soared in value this year to close to $50,000 (£37,786) a piece.

The cryptocurrency peaked above $67,000 in early November, but suffered a sell-off after news first broke of the Omicron variant of coronavirus, before stabilising around its current level in the past week.

The deputy governor, Sir Jon Cunliffe, said the Bank had to be ready for risks linked to the rise of the crypto asset following rapid growth in its popularity. “Their price can vary quite considerably and [bitcoins] could theoretically or practically drop to zero,” he told the BBC.

This Cunliffe character is certainly prone to dramatics, though.  The article reads:

The Bank’s financial policy committee, set up in the wake of the 2008 financial crisis to monitor risks, said on Monday there was little direct threat to the stability of the UK financial system from crypto assets.

And yet, just about 9 weeks ago, Cunliffe was raving:  "Bitcoin could trigger financial meltdown".  Hmm... So how did we get from "meltdown" to "little direct threat" in such a short space of time?  Give it another few weeks and maybe Cunliffe will be calling Bitcoin a fantastic investment.  


But I think the real crux of the matter was this part:

However, it warned that, at the current rapid pace of growth, such assets could become more interconnected with traditional financial services and were likely to pose a number of risks.

Clearly they aren't looking forward to more institutional investors getting on board.  Is it possible they believe that if they can scare off the average member of the public, then the "traditional" investors might steer clear as well?  Seems a little desperate on their part.  

Still, I suppose with the position they're in, with no real influence or control over the outcome, the only thing they can do is fire off warnings.  

[bbc.reporter]

@DooMAD. Agreed. Bitcoin will never be worthless as long as it can give anyone the abilities and powers that banks cannot give an individual. I am talking about money laundering, evading taxes and other illegal things that will certainly weaken the power and control of the government. The largest institutional investors recognizes this as shown through their speculation and interest.

[NeuroticFish]

Although what they've written technically isn't inaccurate, it's not particularly likely either.  People should be cautious, but that goes for anything they do with their banks and other financial companies as well.

The truth is that warnings are necessary. Far too many may FOMO and go head first into Bitcoin, then panic-sell at the first significant drop in price.

Of course, from warnings to bitcoin could be “worthless” there's still quite a leap.
I mean, we can start preaching that the sun will turn into supernova and we are surely right, and at that point bitcoin will probably become worthless, but that doesn't mean that one should fill the newspapers with that.

[davis196]

Central bankers and BTC haters keep saying that Bitcoin "will become worthless" in the last few years.
Well,Bitcoin hasn't become worthless and there's no clear sign that it will become worthless in the near future.
I agree that raising awareness about the potential risks of crypto is one thing,but screaming "SELL,SELL,SELL BITCOIN WILL BECOME WORTHLESS!" like a little b*tch is something completely different.
It seems to me that this is some biased opinion,that might be "paid" by someone else.
There's always a small possibility that Bitcoin could become worthless some day.
We shouldn't get too cocky about the Bitcoin price doing only up and up to the moon.
Everything in the universe has beginning and ending.Nothing lasts forever.
Bitcoin will come to an end some day.

[SFR10]

They do seem to enjoy publishing negative headlines fairly frequently.

As long as they succeed in grabbing our attention, nothing stops them from going down that road ^[SMH].

Although what they've written technically isn't inaccurate, it's not particularly likely either.  People should be cautious, but that goes for anything they do with their banks and other financial companies as well.

Despite seeing there's a lot of exaggerations by the subjects in question, they did have a point in regards to its monetary value but no matter how hard I try to look at the following part from their perspective, I can't understand how on earth they came to the following conclusion!

• He said scarcity of the crypto asset – which is limited to 21m bitcoin – is among the key reasons for its attraction for investors, but this feature embedded into its design “may even, ultimately, render Bitcoin worthless”.

Seems a little desperate on their part.  

And that only means one thing

[Lucius]

Central bankers and BTC haters keep saying that Bitcoin "will become worthless" in the last few years.

They are all on the same page when it comes to Bitcoin, and the common view is that people should be constantly reminded of the risks and dangers, and that they are assured that at some point the price will be zero. My central bank also issues occasional statements that are always negative, and the finance oversight agency and its boss (genius) say the following:

I would recommend everyone to be very well informed before buying any investment about what they are buying and how much they can control and supervise it. When it comes to buying cryptocurrencies, people have to be extremely careful and I wouldn’t really recommend it unless someone is so out of that world and sure they can handle the risks, because the risks are extremely high. You had a situation where in one day the price of bitcoin dropped from 60 to 30 thousand dollars, and it was a little short of not going towards zero, because at that moment the trust was lost, because someone said that bitcoin mining destroys our planet, pollutes the environment . Hundreds of terawatt-hours of electricity are consumed daily to produce bitcoin, and this is mostly done in coal-consuming China. These are huge pollutions, almost unimaginable. Computers that do this job consume an awful lot of energy.

The article is dated June 27, 2021.

Of course, when people read something like this, they become very skeptical and many give up on any idea to invest in Bitcoin. I don’t mind warning people about the risks, but when those who have no idea what they’re talking about do it, then it becomes tragicomic.

Source : Link

[NeuroticFish]

They are all on the same page when it comes to Bitcoin, and the common view is that people should be constantly reminded of the risks and dangers, and that they are assured that at some point the price will be zero.

Actually I've also noticed "the wind of change". After years all the officials in my country were on this same page, lately the voice started becoming softer and not against bitcoin.
And the reason is that they start thinking on CBDCs which they may want to be advertised as "the proper bitcoin" and this cannot be achieved if bitcoin is perceived as bad / worthless.
So expect people get even more confused

[mikemiller023]

 How Bitcoin can be worthless? They are kidding with the readers, or they wanna see the bitcoin in more less price to invest in it. Bitcoin is the top valuable currency of the world. Bitcoin is the most popular and valuable digital asset of the world. It has a real use case. The only one asset which is rising continuously again and again. Which warn or regulation stopped the increase of Btc price.

Actually, they are not conscious that, they are losing their value and trust by publishing such type of news. Every single intelligent person around the world is investing in bitcoin and crypto.

[stompix]

The author from Guardian inserted the "(bitcoin)" without double-checking what the initial interview was. In the original from BBC the picture is completely different:

Speaking to the BBC's Today programme, Sir Jon said that at present, about 0.1% of UK households' wealth was in crypto-currencies.
About 2.3 million people were estimated to hold them, with an average amount per person of about £300.
However, he stressed that crypto-currencies had been "growing very fast", with people such as fund managers wanting to know whether they should hold part of their portfolios in crypto-currencies.
"Their price can vary quite considerably and they could theoretically or practically drop to zero," he said.

He never once pointed the fingers at Bitcoin but at cryptocurrencies as a whole.
His warning was on the entire cryptocurrency sector and at this point, was he wrong? We've seen enough currencies dipping in value losing interest, getting dropped from exchanges, and with an abandoned blockchain that renders them worthless, after pages 20-30 on coinmarketcap/coingeko is almost like a graveyard of coins that once claimed millions in trading and now are slowing rotting away.

Remember Dash? It's now only 10% from its ATH in 2018, guess where the price will go in the future? NEM was on rank 5 then it has dropped 20 times in value since 2018. Tron? Stellar? Same story!

[bbc.reporter]

@stompix. Cryptocurrencies, bitcoin, those people create a similar argument and they want a similar storyline. They only want to tell everyone they are worthless. How can the greatest disruptors of the financial system be worthless? I cannot wait for them to use the terrorists in the cryptospace storyline again hehehe. I predict the government will use this storyline against Defi for 2022.

[stompix]

@stompix. Cryptocurrencies, bitcoin, those people create a similar argument and they want a similar storyline.

The thing is that he didn't say Bitcoin he said cryptocurrencies as a whole.
And at this point my opinion is perfectly clear, 90% of them will turn useless in a few years, and 90% if not more of the poeple investing in them will end up with a loss, call me a bank lackey, a Soros ass kisser or whatever this is my opinion and it will not change.

The problem I see with the article is that they made a headline with Bitcoin in it when there was no discussion specifically aimed at Bitcoin and here I think that the so-called journalist just wanted more clicks.
If the article would have said Tokens or NFT or whatever I doubt anybody here would have given a f about it.

I predict the government will use this storyline against Defi for 2022.

As I was saying above, why do you think they will ever mention Defi? A lot of so-called "Defi" projects have switched already to "metaverse", NFT, trading NFT, they forgot what they were supposed to disrupt, the DeFi hype has died down, it's time for the next one.

[stomachgrowls]

They are all on the same page when it comes to Bitcoin, and the common view is that people should be constantly reminded of the risks and dangers, and that they are assured that at some point the price will be zero.

Actually I've also noticed "the wind of change". After years all the officials in my country were on this same page, lately the voice started becoming softer and not against bitcoin.
And the reason is that they start thinking on CBDCs which they may want to be advertised as "the proper bitcoin" and this cannot be achieved if bitcoin is perceived as bad / worthless.
So expect people get even more confused

Thats how it works on which they do try to stir things up and making people around to get confused and since people do really trust up government that much or simply into those influential people then they do tend to believe and would always end up on having bad impressions towards Bitcoin.

I do heavily agree into that part about "change of wind or words" on a particular time.They might be bombarding lots of negativities on bitcoin
but as long they do see the real beauty of it then they would start to be silenced and might be giving off
some positive insights on later months or years.

So im not really that surprised on these words which we know that it could changed later on.

[buwaytress]

As I was saying above, why do you think they will ever mention Defi? A lot of so-called "Defi" projects have switched already to "metaverse", NFT, trading NFT, they forgot what they were supposed to disrupt, the DeFi hype has died down, it's time for the next one.

Yeah, it's a funny (not literally) adventure to go through some of the projects that were around since 2017/18 and see their quiet rebrandings. From ICO-style "revolutionise/disrupt X industry" to defi to NFT and now metaverse. Forget the favourite word they like to use when shifting their focus (all the while not shifting their actual work, which is almost purely marketing). Edit: the word they like to use is "pivot". lawl.

I'm still waiting for Long Blockchain Corp to decide if it will become Long Blockchain Metaverse NFT Corp. I mean, the last hype name switch they did brought wondrous gains for their shares...

Don't know if people actually learn any lessons from this at all, or realise Bitcoin is really the only thing that's stayed on a steady development path.

[bbc.reporter]

@stompix. Cryptocurrencies, bitcoin, those people create a similar argument and they want a similar storyline.

The thing is that he didn't say Bitcoin he said cryptocurrencies as a whole.
And at this point my opinion is perfectly clear, 90% of them will turn useless in a few years, and 90% if not more of the poeple investing in them will end up with a loss, call me a bank lackey, a Soros ass kisser or whatever this is my opinion and it will not change.

The problem I see with the article is that they made a headline with Bitcoin in it when there was no discussion specifically aimed at Bitcoin and here I think that the so-called journalist just wanted more clicks.
If the article would have said Tokens or NFT or whatever I doubt anybody here would have given a f about it.

I predict the government will use this storyline against Defi for 2022.

As I was saying above, why do you think they will ever mention Defi? A lot of so-called "Defi" projects have switched already to "metaverse", NFT, trading NFT, they forgot what they were supposed to disrupt, the DeFi hype has died down, it's time for the next one.

Agreed, 90% of those cryptocoin projects will turn useless, however, have you noticed that there is always something new that replaced those that turned useless? Go to archive.com and see the top 100 in coinmarketcap.com on 2013 and compare to top 100 on 2021.

Also, Defi as an attachment of the cryptospace will never go away. My theory is any invention that will be useful for moneylaundering, tax evasion and regulatory avoidance to help criminal billionaires will never die.

[stompix]

Agreed, 90% of those cryptocoin projects will turn useless, however, have you noticed that there is always something new that replaced those that turned useless? Go to archive.com and see the top 100 in coinmarketcap.com on 2013 and compare to top 100 on 2021.

So a money pit was changed with another money pit, of course, it did.
It's pretty normal that other coins replaced the ones falling in value, because the older ones started to have less and less value turning into shit while other pumps have grabbed the first spots, eating more and more money from the foolish investors believing in the next hype till they will go down some way replaced by the next circle.

All the poeple that have invested in the old generation in the last year are losing money, that is not compensated for them because some new coins are getting attention, that money is lost, it's like saying that because of Tesla shares rising continuously nobody lost money when PG&E crashed.

Also, Defi as an attachment of the cryptospace will never go away. My theory is any invention that will be useful for moneylaundering, tax evasion and regulatory avoidance to help criminal billionaires will never die.

No, it won't go away completely, nothing will, we still have ICOs, we still have tokens that mimic the craze of 2013 with all stupid unrealistic promises of curing everything, we still have them all, but the hype for that sector is over, so less and fewer poeple will give them attention and certainly not government officials.
And to be completely honest, I don't see how Defi would be a better tool for money laundering than NFTs, remember this fake auction?

Anyhow my point is that when poeple talk about cryptocurrencies we should realize it's all of them, it's not just bitcoin with a lot more bad than good, and more importantly in this article, the author inserted (for god knows what reason) the word Bitcoin when in the original interview the name was never mentioned.
If someone would ask, should I invest in cryptocurrencies I would say the same thing, careful in what you invest, it might turn to zero.
Specify in Bitcoin, a different story.

[bbc.reporter]

@stompix. I understand what you are telling me. However, is there really a difference between saying bitcoin could become worthless and cryptocurrencies could become worthless? I reckon if the person from the Bank of England is telling everyone that cryptocurrencies as a whole could become worthless then he is wrong. Similar to what you have said, the money pit was replaced by another money pit.

[DooMAD]

but no matter how hard I try to look at the following part from their perspective, I can't understand how on earth they came to the following conclusion!

• He said scarcity of the crypto asset – which is limited to 21m bitcoin – is among the key reasons for its attraction for investors, but this feature embedded into its design “may even, ultimately, render Bitcoin worthless”.

I think it's a case of "conventional wisdom" and Bitcoin acting in stark contrast to it.  Economists have always traditionally held the view that a deflationary currency would eventually fail.  So it's not surprising they would express this opinion.  Bitcoin isn't deflationary at the moment, because there is still an emission of new coins.  So it's absolutely not a valid concern at this stage.  However, one day many years from now, after we're all dead and gone and the last sats have been mined, Bitcoin will effectively become a deflationary currency.  I guess future generations will wait and see what happens.

[Woodie]

Bank of England making a comment on cryptocurrencies is a clear indication that these guys are really trying to protect their interest's in precious metals like gold!!

But let us also not forget that fiat and crypto can act as substitutes to each other which goes to show that these cant really coexist!
If BOE wants not to see a worthless coin let them make it legal tender and see it grow.

[DooMAD]

Bank of England making a comment on cryptocurrencies is a clear indication that these guys are really trying to protect their interest's in precious metals like gold!!

I'm not sure how much precious metals come into the equation.  I've always assumed it was more about control.  Right now they have control, but the prevalence of Bitcoin is a potential threat to that.  I'm still very curious about that "near-180°" I referenced in the OP where the narrative suddenly went from "potential meltdown" to "little direct threat" in regard to the impact on the UK economy.  Are they worried it came across as an admission of weakness and now they want to dial it down?  Or have they realised they were initially overreacting?  Maybe the truth lies somewhere in the middle?  But the existence of a system which does not require constant oversight does have the unfortunate (for them) tendency to make the BoE's job look kinda silly.  I can see why they might be feeling a little insecure.

[Slow death]

and who cares about their opinion? if bitcoin had no value then companies like paypal, billionaires and various institutional investors would not waste time with bitcoin or cryptocurrencies, who gives value to something are people, if anyone is willing to take 47000$ to have 1 bitcoin then and why is this person sees some value in bitcoin so they are buying bitcoin, ironic and hearing this coming from a bank where we all know that banks are places where they make loans with high interest rates and take other people's money to make loans, that's what it should be something damnable