Yesterday, the governor of Japan’s central bank, Haruhiko Kuroda, expressed doubts about Bitcoin.
This is reported by Bloomberg who reveals the words uttered by Kuroda:
“Most of the trading is speculative and volatility is extraordinarily high. It’s barely used as a means of settlement”.
Kuroda’s view is in line with that of other central bank governors, whose aim is to keep the value of their currencies as stable as possible.
It is therefore more than obvious that for central bank governors the volatility of an asset appears to be a very negative feature, whereas in fact many investors in bitcoin like this feature so much that they invest in it precisely because it is volatile.
Kuroda also pointed out the difference between cryptocurrencies and stablecoins, as the latter have underlying assets that support their value, and in the future could become a convenient way of payment if they meet sound legal standards and governance codes.
However, Bitcoin is too different from fiat currencies (which are stable, inflationary and have a variable and arbitrary monetary policy) to be judged by the same criteria as currencies widely used as a medium of exchange, or stablecoins which are nothing more than tokens that bring these same fiat currencies into the crypto world.
It is understandable that central bank governors find it hard to imagine that there could be currencies with characteristics different from those they manage, but the market seems to think otherwise.
What is curious is that after flooding the financial markets with huge volumes of liquidity, the likes of which have never been seen before, central banks are now surprised by the volatility of financial assets.
Bitcoin’s price after statements by Bank of Japan president
The price of bitcoin is falling today, perhaps due in part to Kuroda’s statements, as the drop began when it was night in America and Europe and day in Asia.
Yesterday the price had returned to $40,000, but during the course of today it fell first to $38,000, then to $37,000, and then even to $35,500, before recovering to $36,000.
Since the flash crash of 19 May, the price of BTC has not managed to get back above $40,000, except for short periods.
For the past ten days or so it has been sideways in a range between about $35,000 and $40,000, but still with high volatility.