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Bank of Korea chief says crypto has no intrinsic value, expects volatility

Amid a major downward correction in the cryptocurrency market, the head of South Korea’s central bank is skeptical about digital currencies like Bitcoin (BTC).

Bank of Korea Governor Lee Ju-yeol stated that crypto assets like Bitcoin have no intrinsic value, local news agency Yonhap reports Tuesday. The official stated that he expects more price swings on the market, saying, “It is very difficult to predict the price, but its price will be extremely volatile.”

According to Cointelegraph, speaking at the National Assembly, Lee also addressed possible reasons behind the recent sharp crypto rally, which led Bitcoin to become a $1 trillion asset. The BOK governor noted several factors including global concerns over excessive inflation, growing institutional interest, as well as a massive $1.5 billion Bitcoin purchase by Elon Musk’s Tesla.

Lee stated:

“These assets saw a steep rise in the shortest period of time. I would say institutional investors’ assessment of using bitcoins as a hedge could be interpreted as another factor.”

Lee claimed that the BOK is progressing with its central bank digital currency, according to The Korea Times.  He also stated that “The bank is close to completing our review of designs and relevant technologies regarding bank-controlled digital currencies.”

On Feb. 22, bitcoin saw a steep correction with its price plunging from above $58,000 to below $48,000. In an interview on Monday, United States Treasury Secretary Janet Yellen criticized Bitcoin and stated that the world’s biggest cryptocurrency is an “extremely inefficient way of conducting transactions.”

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