Bank of England Governor Andrew Bailey warned crypto investors. He reiterated his warning about investing in cryptocurrencies after crypto platform Celsius (CEL) abruptly frozen withdrawals. He emphasized that investors should be prepared to lose all their money and said that crypto has no intrinsic value.
BK CBT warns crypto investors after Celsius (CEL) freezes operations
Bank of England (BOE) Governor Andrew Bailey on Monday the British parliament’s Public Accounts He reiterated to his committee his concerns about investing in cryptocurrencies. In response to a question about how the regulators’ duty to protect consumers might conflict with the government’s plan to promote financial innovation, quoted by Reuters was:
If you want to invest in these assets, fine, but be prepared to lose all your money. be. People may still want to buy them because they have extrinsic value. People value things for personal reasons
Bank of England governor adds:
But they have no intrinsic value. We saw another explosion on a crypto exchange this morning.
Bailey talks about suddenly freezing withdrawals from US crypto lender Celsius. After a sell-off over the weekend, the crypto market turned into a bloodbath on Monday. Andrew Bailey has warned several times before that Bitcoin has no real value. He also said in May that BTC is not a practical means of payment. In April, he claimed that crypto creates “an opportunity for the downright criminal.” He warned last year that cryptocurrencies are dangerous. Meanwhile, the Bank of England said in March that crypto assets present financial stability risks.
What’s going on in Celsius?
Amid its market crash, Celsius announced on June 12 that it is suspending all withdrawals from its lending platform, citing “extreme market conditions” and the need to “stabilize liquidity.” In the hours after the announcement, Celsius’s token CEL dropped 70% within an hour. The next day it experienced an additional drop of over 40%.
Celsius is a typical DeFi platform. Anyone can lend and borrow money. But with the latter, borrowers must over-collateralize their loans. That is, the borrower has to deposit more than he borrowed.
Users can get high returns once they deposit some money into the protocol. According to its website, Celsius offers returns of 7% on stablecoins like USDC and Tether, 7.25% for Polygon, 6% for Ethereum and over 6.25% for Bitcoin.
However, ETH-stETH has lost price stability. stETH represents locked or staked ETH for Ethereum 2.0. In summary, stETH has recently lost support for ETH and threatened these positions. As a result, funds locked in sETH entered a liquidity crisis. Thus, it led to one-sided intense selling pressure. As Kriptokoin.com we have covered the details in this article.
