Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, doesn't eveb consider digital currency bitcoin and its associated virtual brethren serious investment instruments.
"If you live in any modern advanced economy I would stick with the dollar I would stick with the yen and leave bitcoin for the, you know, toy collectors," Kashkari said during a town hall meeting in Pierre, South Dakota.
"I don't really think of bitcoin as a currency. I think of it as a novelty. The idea that these virtual currencies are ever going to compete with the dollar is hard to fathom," Kashkari said.
Although bitcoin itself may be scarce like gold, "the problem is the barrier for entry for anybody creating another version of bitcoin is zero," CNBC cited him as saying.
However, not everyone is so quick to discard what many experts consider an investing fad.
Central banks need to be ready to meet evolving demand for virtual currencies but with digital versions of cash rather than bitcoin-style cryptocurrencies, ECB policymaker Yves Mersch said on Thursday.
Mersch added that negative interest rates, like those currently at the ECB, were part of the debate. However he stressed that “deeply negative” rates would not become a standard instrument in the central bank’s toolbox, Reuters explained.
To be sure, investors are increasingly willing to spread their bet against bitcoin, Bloomberg reported.
Investors using London-based contracts-for-difference firm IG Group Holdings Plc have increasingly taken bets on declines in the cryptocurrency. That’s a change from a year ago when a far greater majority wanted to be long, according to Adam Blemings, head of futures and foreign exchange.
Last January, more than 90 percent of the company’s customers were betting on price rises. Now as many as a quarter are betting on declines, Blemings said in an interview in London on Feb. 5.
“This time last year, everyone wanted to be long Bitcoin,” Blemings said. “That’s not what we’re seeing now.”
(Newsmax wire services contributed to this report).
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