Ben Bernanke, former chairman of the Federal Reserve, mentioned that he doesn’t assume bitcoin would take over “as an alternative form of money.”
Bitcoin
BTCUSD,
-3.52%
and different cryptocurrencies have been “successful as a speculative asset,” Bernanke mentioned in an interview with CNBC’s Squawk Box that aired Monday morning. “You are seeing the downside of that right now,” Bernanke mentioned.
Bernanke made the remark after bitcoin fell greater than 55% from its all-time excessive in November whereas ether
ETHUSD,
-4.41%
is down greater than 58% from its file excessive, based on CoinDesk knowledge. The Nasdaq Composite
COMP,
-0.38%
has misplaced about 27% from its peak.
“If bitcoin were a substitute for fiat money, you could use bitcoin to go buy your groceries. Nobody buys groceries with bitcoin because it’s too expensive and too inconvenient to do that,” Bernanke mentioned within the CNBC interview. “The price of celery varies radically day to day in terms of bitcoin and so there’s no stability either in the value of bitcoin,” Bernanke mentioned.
Bitcoin supporters have argued that the Lightning community, which is layered on prime of the Bitcoin blockchain, might enhance the velocity and cut back charges for transacting on the community.
Key Words: Bitcoin’s future isn’t as a funds community, says FTX’s Sam Bankman-Fried
Bernanke additionally mentioned he doesn’t assume bitcoin has the potential to function a “store of value” or “digital gold,” a story endorsed by many supporters of the cryptocurrency.
“Gold has underlying use value. You can use it to fill cavities. The underlying use value of a Bitcoin is to do ransomware or something like that,” Bernanke mentioned within the interview.
Bernanke’s views on digital belongings appear to have advanced over years. In 2013, in a letter to the Homeland Security committee, the Fed chair then identified the central financial institution’s longstanding view that although digital currencies could pose dangers associated to legislation enforcement, “there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
In 2015, Bernanke instructed Quartz that bitcoin “was interesting from a technological point of view,” but it surely “has some serious problems,” citing its volatility and anonymity.
Read: Crypto fans sniff at Buffett, Munger feedback on bitcoin. ‘It took them decades before they decided to invest in Apple,’ one analyst says.
Also learn: More shoppers wish to use cryptocurrencies for purchases, however retailers are hesitant to just accept them
