Fed Governor Waller: Crypto Is Speculative & Big Risk for Investors

• Christopher Waller, Federal Reserve board governor, has stated that most crypto assets are „speculative“ and lack any real value.
• He is concerned about banks engaging in activities that present a heightened risk of fraud and scams.
• Warren Buffett and Charlie Munger have made it clear over the years that they don’t think much of bitcoin or its digital counterparts.

Christopher Waller’s Opinion on Crypto Assets

Christopher Waller, Federal Reserve board governor, has recently voiced his opinion on cryptocurrency assets. In an interview he said that most digital currencies were „speculative“ and comparable to baseball cards, with no real value other than what is believed by others. He also expressed concern about banks engaging in activities that present a heightened risk of fraud and scams due to the lack of regulation in this space.

Warren Buffett & Charlie Munger’s Views

Warren Buffett and Charlie Munger have made it clear over the years that they don’t think much of bitcoin or its digital counterparts. In fact, Buffett has gone so far as to call bitcoin „rat poison squared“ in the past.

Price Crashes

The crypto space has earned its fair share of haters in recent years given the volatility and price crashes traders have witnessed. BTC, for example, fell from its November 2021 all-time high of about $68,000 per unit and ultimately ended 2020 at around $30,000 per coin – a drop of more than 50%.

Record Spillover

Waller also commented on the record “spillover” that’s occurring from the crypto industry to the standard financial system due to the limited number of interconnections between them. He feels cryptocurrency exchanges must be forceful about KYC (know your customer) protocols to ensure they are who they say they are if they want to be taken seriously in this space.

Conclusion

It appears many members of traditional financial institutions do not take kindly to cryptocurrencies due their volatile nature and lack of regulations surrounding them. While Waller supports innovation within finance systems as long as it is done safely an quietly, he does not see much value within cryptocurrencies themselves beyond speculation from investors or traders.