Yesterday, the Governor of the Central Bank of Iceland reiterated his warning against investing in Bitcoin and likened the activities surrounding the cryptocurrency to a pyramid scheme.
Ásgeir Jónsson commented on an Icelandic radio station The wave, which echoes the bank’s warnings last month. The Governor of the Central Bank is particularly concerned about individual Icelanders who reflect on the value of Bitcoin and make risky investments in a highly volatile product of unclear origin, cf. Indicator.
“When you hear that people are buying these coins to try to profit from it, you start to worry,” Ásgeir told Bylgian. “I warn against all speculation and we are talking about a very strange property. It is one thing to buy shares in a company, or a bond issued by a party that has actual operations and revenue streams. Here, people just bet on the value of a rising currency and it looks a bit like a pyramid scheme. “
Criminal ties and ecological concerns
In addition to high risk for investors, the governor noted concerns that Bitcoin transactions are often used as part of criminal transactions. Creating and trading virtual currencies also requires large amounts of computing equipment and electricity. It is estimated that 4.5% of the electricity consumed in Iceland is used solely to support these activities.
The Icelandic Blockchain Foundation– Introducing cryptocurrencies – tried to boost confidence in Bitcoin last month. Last week, however, the value of bitcoin fell sharply after Elon Musk – a prominent investor in the cryptocurrency – tweeted that the price of Bitcoin did “Seems a bit loud lol.”
The bank’s view that Bitcoin is an unstable investment was supported by Gylfi Magnússon – professor at the University of Iceland’s business department – in a recent interview with The essence. He predicts that investors are in risky trades.
“Those who bring money into the last part of the ball increase come out worst. The average investor loses a significant part of their investment because the total value creation is not zero, but negative due to the cost of mining, “said Gylfi.
Source: The Nordic Page