In brief

  • Andrew Bailey, incoming Governor of the Bank of England, warned Bitcoin investors that they should "be prepared to lose all your money."
  • Bitcoin has "extrinsic value," but not "intrinsic value," says Bailey.
  • Bailey's bearish comments mirror remarks he made to BBC Newsnight in 2017.

The new bank of England (BoE) boss Andrew Bailey hasn't minced his words when it comes to Bitcoin, proclaiming that investors should "be prepared to lose all your money."

During a UK parliament select committee hearing on Wednesday, Bailey—who will formally assume the position of Governor on March 16—claimed that Bitcoin has "no intrinsic value."

There is no guarantee of the value of Bitcoin," he said, "If you want to buy Bitcoin, be prepared to lose all your money [...] But understand what you've got, it has no intrinsic value."

However, the newly appointed governor did concede that Bitcoin had "extrinsic value," in other words, that its value is derived from factors other than its actual utility—which gets pretty philosophical once you get thinking about it. For instance, it could be argued that gold has no intrinsic value. Instead, it derives its worth from an economic context. Indeed, this is playing out at this very moment, with the price of gold increasing to reflect the uncertainties facing the global economy.

 

However, the main point of contention around Bailey's claims was the notion that Bitcoin hadn't "caught on much," giving rise to the crypto community's new favorite catchword: "OK Banker."

On Twitter, one user pointed to data from Statista that shows a near 500% increase in cryptocurrency users in the past four years.

"Cryptocurrency users have increased from 8.95 Million users to 44.69 million users [...] And we are to suggest this banker is good with numbers? #OKBanker" the tweet read.

Bailey's bad news for Bitcoin

Bailey's comments are nothing new. The former head of the Financial Conduct Authority (FCA) has maintained a bearish stance on cryptocurrencies since 2017. Speaking to BBC Newsnight in late 2017, he struck a similar tone, saying that, "If you want to invest in Bitcoin, be prepared to lose all your money."

Despite the intervening years of progress, the entry of the intercontinental exchange's brainchild Bakkt—and even a comprehensive investigation into the benefits of a central bank digital currency—Bailey's outlook on Bitcoin remains bleak.