The incoming governor of the Philippine central financial institution, Felipe Medalla, has advised that individuals that put money into cryptocurrencies like bitcoin are adherents of the Greater Fool Theory. He additionally argued that individuals investing in cryptocurrencies are doing so as a result of they wish to “hide their money from the government.”
A ‘Very Scary’ Investment Strategy
The new governor of Bangko Sentral ng Pilipinas (BSP), Felipe Medalla, has claimed that bitcoin traders solely purchase the cryptocurrency as a result of they’re satisfied that another person will purchase the identical digital asset at a better worth. According to Medalla, who spoke at a digital roundtable dialogue that was organized by a neighborhood media outlet, such an funding technique is “very scary.”
Also, as reported in Business World, Medalla believes the worth proposition of cryptocurrencies is predicated on the so-called Greater Fool Theory. According to Investopedia, the idea asserts that costs go up as a result of traders can promote overpriced securities to different traders or the “greater fools.” Investors subscribing to this idea are identified to disregard valuations, earnings reviews, and all the different knowledge.
Using Crypto to Hide Funds
In addition to the Greater Fool Theory claims, which have been additionally not too long ago raised by Bill Gates, the incoming BSP governor stated those that select to put money into cryptocurrency accomplish that as a result of the digital foreign money provides them a capability to cover their holdings. He defined:
This is a brand new software that provides to the capacity to try this. There are a lot of individuals who wish to conceal their money from the authorities.
While the BSP doesn’t instantly regulate cryptocurrencies, it has issued pointers that require digital asset service suppliers (VASPs) to safe a license from it. Medalla, in the meantime, is quoted in the identical report expressing his approval of the application of know your buyer (KYC) and anti-money laundering insurance policies on VASPs.
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