Bank of England boss Bailey says 'be prepared to lose all your money' in crypto after lender Celsius freezes accounts
- The Celsius fallout has prompted Bank of England boss Andrew Bailey to warn again about crypto investing.
- The BoE governor told lawmakers Monday that crypto investors should be prepared to lose all their money.
As crypto markets tumbled, the governor of the Bank of England doubled down on warning people they should brace for big losses if they decide to invest in digital assets.
"If you want to invest in these assets, OK. But be prepared to lose all your money," Andrew Bailey told lawmakers Monday.
"People may still want to buy them because they have extrinsic value ... people value things for personal reasons. But they don't have intrinsic value. This morning we have seen another blow-up in a crypto exchange," the BoE chief told members of the Public Accounts Committee.
Bailey was speaking after crypto lender Celsius Network said it had frozen withdrawals, swaps, and transfers between accounts due to "extreme market conditions".
That rattled investors' confidence in the stability of crypto markets, which already took a battering in May when the collapse of algorithmic stablecoin TerraUSD and its sister token luna spurred a plunge in prices.
Monday saw a similar crypto meltdown, with the price of bitcoin plummeting to an 18-month low. The Celsius move added to a slide driven by the surprise red-hot US inflation reading for May, which let investors to shun riskier assets.
On Tuesday, bitcoin lost a further 10% from the previous day, to trade at $22,134, according to CoinMarketCap data. Other tokens felt the blow, with ether, cardano, solana, and dogecoin all plunging.
Bailey has long been skeptical about cryptocurrencies, and he described them as "dangerous" for the general public last year.
As BoE chief, he himself has come in for criticism after he warned of "apocalyptic" rises in the price of food and said workers should not seek pay rises, as they could worsen inflationary pressures in the UK.