Former Fed chair says Bitcoin has been successful only as speculative assets
Ben Bernanke warned Bitcoin investors to remain aware of two future upcoming risks.
Ben Shalom Bernanke is an American economist and professor. He is a distinguished fellow at the Brookings Institution. From 2006 to 2014, Ben served two terms as the 14th Chairman of the US Federal Reserve.
Ben Bernanke recently appeared in an interview with CNBC. Through the interview, the Former Federal Reserve shared two existential risks on Bitcoin, which may arise from government and lawmakers.
Ben said:
“One of the other risks that Bitcoin has is that it could, at some point, be subject to a lot more regulation. And anonymity is also at risk, I think, at some point. So investors in Bitcoin should be aware of that.”
Ben explained that Bitcoin and other crypto-assets failed in their initial phase because of high volatility in minutes. According to the former Federal Reserve chair, these cryptocurrencies are trying to replace fiat currencies but in his opinion, they can’t because of very high volatility.
According to Ben, crypto assets are highly speculation-based assets and also they grabbed better success as speculative assets but these speculation-based associative natures are creating another negative factor for crypto adoption.
Further Ben added:
“The price of groceries, the price of celery, varies radically day-to-day in terms of Bitcoin. So there is no stability either in the value of Bitcoin.”
In this way, Ben tried to emphasize that Bitcoin can’t replace fiat currency. These statements by Former Fed Res are hints that El Salvador & Central African Republic countries will fail to adopt Bitcoin as a currency at a real level.
El Salvador’s Bitcoin adoption
At present only two countries, El Salvador & Central African Republic, allow citizens to use Bitcoin as a legal tender. But in reality on the ground state, these countries are not getting a much better response.
El Salvador introduced the Bitcoin law on 7 September 2021 and also did huge work in favor of Bitcoin adoption in the payment system but only a small fraction of the population is interested and actively using bitcoin. Probably before adoption, population needed education & awareness about Bitcoin as a first priority.
Read also: Swiss think tank emphasizes for global regulatory approach to control crypto market
