Bitcoin and cryptocurrencies have exploded in value over the past year, making the combined crypto market worth a staggering $2.1 trillion.
The bitcoin price, peaking at almost $65,000 per bitcoin in April after a blistering six-month rally, has settled at around $50,000—for now. Meanwhile, the ethereum price has soared even further, boosting the price of many of its newer rivals.
Now, amid a surge of interest in smaller cryptocurrencies such as cardano, Binance’s BNB, Ripple’s XRP, solana and dogecoin, European Central Bank (ECB) president Christine Lagarde has warned cryptocurrencies aren’t currencies and should be treated as “highly speculative” and “suspicious.”
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“I think we have to distinguish between cryptos that are those highly speculative, suspicious occasionally, and high intensity in terms of energy consumption assets, but they’re not a currency,” said Lagarde, speaking on a Bloomberg podcast. “Cryptos are not currencies, full stop. Cryptos are highly speculative assets that claim their fame as currency, possibly, but they’re not. They are not.”
Alongside bitcoin’s huge rally, ethereum, cardano, Binance’s BNB, Ripple’s XRP, solana and dogecoin have all made triple-digit percentage gains this past year as investors bet the digital tokens will continue to appreciate in value amid rising adoption. Bitcoin, the most valuable cryptocurrency by a considerable margin, is now being used as both a currency and store of value, with El Salvador recently making bitcoin its official currency alongside the U.S. dollar.
However, Lagarde went on to praise stablecoins—cryptocurrencies like tether that are tied to traditional currencies or real-world assets—and central bank digital currencies (CBDCs).
“You have those stablecoins that are beginning to proliferate, which some big techs are trying to promote and push along the way, which are a different animal and need to be regulated, where there has to be oversight that corresponds to the business that they’re actually conducting, irrespective of how they name themselves,” Lagarde said.
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