The world of cryptocurrencies has undoubtedly gained a lot of attention in recent years, but its level of acceptance by the general public still seems to be unknown. A large number of people believe that cryptocurrencies are not worth investing in. Some people even see investment in cryptocurrencies as illegitimate investments despite the widespread enlightenment.
The Chief Executive of Bank of Korea, Lee Ju-Yeol, is not left out either. He recently declared his beliefs regarding cryptocurrencies are saying they are of no inherent value. From his statement, he seems to believe the rise and fall in the price of the currencies are due to external factors that influence the price of cryptocurrencies.
Could He Be Right?
During an interview with a lawmaker, the Bank of Korea’s chief reported that cryptocurrencies have no intrinsic value and the price is unpredictable. He also made comments regarding the volatility of cryptocurrencies as a backing for his point.
Well, could he be right?
In a sense, he may be right and may be wrong.
Considering the recent surge in Bitcoin’s price to $58,000 accompanied by its corresponding fall by $6000, he may have a point.
The cryptocurrency seems to be free, but then, it’s still controlled by market emotions and demand and supply laws. Meaning its value is only gotten from the external demand for it and nothing more.
But then, the market seems to be on a trajectory of constant growth. Bitcoin and a lot of other cryptocurrencies have shown their value over the years. With an increasing acceptance in cryptocurrencies for market activities, buying and selling, it seems a bit erroneous to say the cryptocurrencies are valueless.
Yet Volatility Remains a Big Deal
The rise in Bitcoin lately was largely influenced by Tesla CEO Elon Musk’s actions regarding his decision to invest in cryptocurrencies. The profits Tesla accrued have had many jaws dropped. A host of other factors has contributed too. This makes it a bit impossible to predict such cryptocurrencies’ prices as a little external influence can cause a dramatic fall or rise in the price value.
Lee, in his statement, also confirms that it is not suitable to buy bonds directly from the stock market. The South Korean government has also taken measures to counteract the effect of the pandemic on the market.