The President of the Federal Reserve Bank of Minneapolis reportedly says that Bitcoin (BTC) has no legitimate use case and that it may be putting investors into “harm’s way.”
Neel Kashkari, the bank’s President and CEO says that BTC is more of a consumer safety risk than a financial stability risk.
In a LinkedIn Live conversation, Kashkari says that those investing in the top crypto asset by market cap are doing so without knowing what they are investing in.
He compares the crypto king to Beanie Babies – a line of stuffed animals that were once extremely popular among children – saying that BTC’s market cap could go down to zero.
“[Bitcoin has] no actual utility in the economy, other than being a nice toy that some people enjoy owning and trading.”
According to Kashkari, people are also using BTC to “subvert banking regulations, get around either marijuana banking, or [conduct] illicit activities.”
Kashakri also says that people should be wary about comparing Bitcoin’s success to retail giant Amazon.
“The ‘Bitcoin bros’ would say…in 1994 nobody ever bought a book online, so [someone could say] Amazon has no future. This is not Amazon in 1994.
This is Amazon in 2004. Bitcoin has been around for more than a decade, and more than a decade later, there’s still no legitimate use case in an advanced democracy.”
Bitcoin proponents say BTC is essentially digital gold – a provably scarce and global asset that can be transferred around the world in a matter of minutes for nominal fees.
This scarcity has triggered increased Bitcoin adoption in a number of countries like Argentina, where Bloomberg reports people are buying and holding the asset as a store of value against rampant inflation.
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