Cryptos Are Worthless, Says ECB President Lagarde

It is now known that central bankers are not a fan of cryptocurrencies such as bitcoin (BTC) and ethereum (ETH). Christine Lagarde, president of the European Central Bank (ECB), also says that she is not in favor of it.

crypto are worth nothing

Lagarde was a guest on the Dutch television program College Tour last week. The new episode was shown on NPO last night. In the broadcast, the ECB president stated that she considers crypto worthless:

“My very humble judgment is that it is worth nothing. It’s based on nothing. There is no underlying asset that can serve as a security anchor.”

According to Lagarde. During the broadcast, the student audience was asked how many of them invest in crypto. About a third of the audience raised their hands. A college student then went on to say that he had lost as much as $7,000 on his cardano (ADA) investment. “That hurts,” replied Lagarde.

Crypto crash is no surprise

Lagarde said the recent crash is no surprise to her, as if she knew in advance what was going to happen to terra (LUNA) and terraUSD (UST).

“What worries me about crypto is that it is being invested by people who don’t realize they can lose everything. I mean, it was down 20% last week. In just a week!”

Apparently, we’re disregarding the fact that traditional stock markets have behaved just as volatile lately and that stocks of major tech companies are even deeper in the red than bitcoin. Nevertheless, Lagarde is not arguing for a total ban on crypto, only for more regulation.

“I’m worried about people who assume it will pay off, who don’t understand the risks, who will lose everything, and be terribly disappointed. That’s why I think it should be regulated.”

Digital euro and interest rate hike

Her attitude can be partly explained by the fact that she is in favor of a digital euro. It is then a so-called central bank digital currency (CBDC), a crypto issued by the central bank. In this case a stablecoin pegged to the euro. In her view, the central bank is giving confidence to a CBDC, but the crypto community will think otherwise.

Furthermore, Lagarde hints that the ECB, like the Federal Reserve, may be planning to raise interest rates next month. It will probably be a quarter of a percent to counter rising inflation, but could turn out higher. However, that could lead to even more selling pressure in risky stock markets and bitcoin.