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The head of the Bank of Korea, Lee Ju-yeol, said that Bitcoin and other major cryptocurrencies lack intrinsic value. However, he believes that all assets will continue to experience significant price fluctuations.
Price Surge Because of Pro-BTC Institutional Investors?
The chief of the Bank of Korea said cryptocurrencies, including Bitcoin, do not possess inherent value. In a recent news report, Lee Ju-yeol blasted the highly volatile nature of the digital asset industry.
âThere is no intrinsic value in crypto assets,â said BOK Gov. Lee Ju-yeol at a parliamentary session on 23 February.
The news report quoted lawmakers asking BOKâs chief if the recent surge in the price of BTC is temporary or not.
âIt is very difficult to predict the price, but its price will be extremely volatile,â Ju-yeol added.
The bank executive has also said that the recent rally in Bitcoinâs price followed by other significant digital assets may be led by multiple factors. Among them, Elon Muskâs Tesla â investing $1.5 billion. He highlighted that the latest price surge might be a continuation of institutional investors using Bitcoin as a hedge.
Ju-yeol also emphasized that BOK shouldnât buy bonds issued by the countryâs government directly. Otherwise, this would raise worries about fiscal stability and undermine the central bankâs trust.Â
Bitcoin Volatility Bringing Some More Hard Times For Investors?
The primary cryptocurrencyâs volatility has been causing quite some troubles for both retail and institutional investors. This particular character of the digital assets has been a stumbling point for many, thus, causing some hesitations in whether to allocate funds in it or not.
BTCâs price managed to initiate another notable surge during the last couple of months, marking a consequent all-time high. Just a few days ago, it skyrocketed above $58,000, dragging other altcoins like Ethereum behind it for a while.
However, almost immediately after its upgrowth, BTC suffered a significant correction, settling unsteadily around $50K as per the time of the writing. As a result, the cryptocurrency market capitalization lost more than $300 billion in two days.
Interestingly, JPMorgan strategists said recently that Bitcoinâs illiquidity could bring more problems. Analysts from the US multinational banking institution argued that BTC is in a liquidity shortage, warning investors that the primary crypto-asset could suffer another price drop.
Featured Image Courtesy of WSJ.Â
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.