Former Federal Reserve Chair Ben Bernanke is issuing a warning to Bitcoin (BTC) investors.
In a new CNBC interview, Bernanke says Bitcoin faces two existential risks from lawmakers and governments.
“One of the other risks that Bitcoin has is that it could, at some point, be subject to a lot more regulation. And the anonymity is also at risk, I think, at some point. So investors in Bitcoin should be aware of that.”
The former Fed chair says that Bitcoin and other cryptos have failed in their initial mission.
“Bitcoin and other cryptocurrencies whose value changes minute to minute have been successful as speculative assets. And people are seeing the downside of that right now. But, they were intended to be a substitute for fiat money. And I think, in that respect, they have not succeeded.
Because if Bitcoin were a substitute for fiat money, you can use your Bitcoin to buy your groceries. Nobody buys groceries with Bitcoin because it is too expensive and too inconvenient to do that. Moreover, the price of groceries, the price of celery, varies radically day-to-day in terms of Bitcoin. So there is no stability either in the value of Bitcoin.”
According to Bernanke, Bitcoin is unlikely to replace fiat currencies as a form of money.
“I don’t think that Bitcoin is going to take over an alternate form of money. It will be around as long as people are believers and they want to speculate in it.”
Bitcoin is trading for $29,800 at time of writing.
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Featured Image: Shutterstock/Tithi Luadthong
