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Felipe Medalla, the incoming governor of the Central Bank of the Philippines, suggested that people who invest in cryptocurrencies like bitcoin are adherents of the Big Fool theory. He also claimed that people who invest in cryptocurrencies are doing so because they want to “hide money from the government.”
a “very scary” investment strategy
Felipe Medalla, the new governor of the Bank of the Philippines (BSP), claimed that bitcoin investors are buying cryptocurrencies because they are convinced that someone else will buy the same digital asset at a higher price. According to Medalla, who spoke at a virtual roundtable organized by local media, such an investment strategy is “very scary.”
Medalla also believes that the value proposition of cryptocurrencies is based on the so-called Greater Fool Theory, as reportedin Business Worldaccording to InvestopediaThis theory states that an investor can buy overvalued securities from other investors or “big fools” to sell them, thus causing prices to rise, it argues. Investors who subscribe to this theory have been known to ignore all data, including valuations and earnings reports.
Use crypto to hide funds
In addition to the Greater Fool Theory argument recently raised by Bill Gates, the incoming BSP president said that those who choose to invest in cryptocurrencies do so because digital currencies give them the ability to hide their holdings. He explained.
This is a new tool that adds the ability to do that. There are many people who want to hide their money from the government.
The BSP does not directly regulate cryptocurrencies, but it has issued guidelines requiring virtual asset service providers (VASPs) to secure licenses from the BSP. Medalla, on the other hand, is cited in the same report and has expressed its support for the application of know your customer (KYC) and anti-money laundering policies regarding VASPs.
Image credits: Shutterstock, Pixabay, Wiki Commons
