According to Christopher Waller, Board Governor of the US Federal Reserve, not all components of the cryptocurrency ecosystem are equal. Waller issued warnings to those dealing with digital assets, warning investors that they risk losing their money and banks that they must take steps to combat false actors and threats to the financial system.
Fed's Waller says crypto is risky, Harker sees continued demand https://t.co/wjymMQpX0m pic.twitter.com/D1AAnqygau
— Reuters (@Reuters) February 11, 2023
However, according to survey results provided by Patrick Harker, president of the Philadelphia Fed, cryptocurrencies will likely continue to be in demand despite the aforementioned risks.
Warning From Waller: The Risks Of Investing In Cryptocurrencies
On February 10, Christopher Waller, board governor of the US Federal Reserve, spoke at a Global Interdependence Center event. Waller’s discussion focused primarily on cryptocurrency assets. He compared crypto assets to corn, a commodity he claims has no intrinsic value, to demonstrate how the “social contrivance of money” allows for the profitable trading of things with no intrinsic value.
Furthermore, he stated that cryptocurrencies are merely speculative assets, similar to baseball cards.
New speech by Fed Governor Christopher Waller – Thoughts on the Crypto Ecosystem #payments #crypto #cryptocurrency #stablecoins #communitybanks @ICBA https://t.co/OVDc7rBbdl via @FederalReserve pic.twitter.com/iWTeBKmWkV
— Brian Laverdure, AAP (@brian_laverdure) February 10, 2023
Waller explained to attendees at the conference that not all components of the crypto industry are created equal. He divided cryptocurrency, blockchain, and trade technology into three categories (tokenization and smart contracts). He identified three components and had strong preferences for each.
Waller also cautioned cryptocurrency traders to exercise caution because cryptocurrencies are risky investments. After all, they have no intrinsic worth. He warned investors not to be surprised if the value of their crypto assets falls to zero at some point, and not to expect the government to compensate them for their losses.
Crypto Demand To Remain: What Harker Has To Say About It
The Philadelphia Fed is led by Patrick Harker. A few hours later, he spoke at the same conference. Harker provided survey data indicating that, despite the risks, demand for cryptocurrencies will most likely continue. According to data from a survey conducted in October 2022, at least some Americans are still in favor of the idea.
According to the report, crypto buyers are still predominantly male, younger, and wealthier than the average American, with Black and Hispanic customers being overrepresented.
UPDATE 1-Fed's Waller says crypto is risky, Harker sees continued demand . Federal Reserve Governor Christopher Waller on Friday had a pair of warnings for those involved in cryptocurrency assets, telling buyers they could lose their investments, and banks that they mus
— 十七 (@shiqi84084285) February 10, 2023
According to Harker, the socioeconomic groups most likely to buy cryptocurrency haven’t changed significantly, nor has the importance of investment and research as market incentives. He went on to say that these trends suggest that, despite the current bear market, several customers will remain interested in cryptocurrency.
However, Harker observed that less than 40% of poll respondents expected to purchase more cryptocurrency in the future, compared to more than 50% in a similar survey conducted in January 2022.
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