Bitcoin investors should be prepared ‘to lose all their money’

Makhlouf issues warning about cryptocurrency; Elon Musk’s #bitcoin tag boosts value

On Friday, Bitcoin rallied above $35,000, with brokers attributing the move to Elon Musk mentioning the cryptocurrency on Twitter.

On Friday, Bitcoin rallied above $35,000, with brokers attributing the move to Elon Musk mentioning the cryptocurrency on Twitter.

 

Bitcoin investors need to be prepared to “lose all their money”, Central Bank governor Gabriel Makhlouf has said, in the latest warning from a central banker on the cryptocurrency.

“Personally, I’m not sure why people invest in those sorts of assets, but they see them as assets clearly,” Mr Makhlouf said. “Our role is to make sure that consumers are protected.”

Mr Makhlouf’s comments echo scepticism from the European Central Bank. The cryptocurrency is a “highly speculative asset”, ECB president Christine Lagarde said this month. Bitcoin prices have more than doubled since November and topped $40,000 (€33,000) earlier this month.

Large movements in its value are common, with four daily swings of more than 5 per cent in the past nine days.

On Friday, Bitcoin rallied above $35,000, with brokers attributing the move to Elon Musk mentioning the cryptocurrency on Twitter.

Still, Mr Makhlouf doesn’t see “financial stability issues at the moment arising from Bitcoin itself”.

“I worry more about about consumers making the right choices,” he said.

Triggered

Separately, on Friday, a “#bitcoin” tag on Elon Musk’s Twitter profile page led to a 14 per cent jump in the cryptocurrency, the latest in a series of market moves triggered by comments on his social media account.

The Twitter handle of the world’s richest person has joined the growing list of things to watch for those trading stocks for personal or professional purposes, and comes amid the rising prominence of the “WallStreetBets” Reddit chatroom that drove skyrocketing gains for GameStop shares. That forum grabbed Mr Musk’s attention too when he tweeted “Gamestonk!!” on Tuesday, along with a link to the Reddit stock trading discussion group behind the year-to-date 2,500 per cent-plus rally in the video game retailer.

“Stonks” is a tongue-in-cheek term for stocks widely used on social media. His supporters in the Reddit forum affectionately refer to him as “Papa Musk”.

His tweets led to surges in other stocks too. Shares of fast-growing Polish game developer CD Projekt soared 16 per cent on Thursday after Mr Musk tweeted “The esthetics of Cyberpunk are incredible btw....”. Cyberpunk is the company’s flagship game. Similarly, online retailing platform Etsy’s stock jumped 9 per cent on Tuesday after Mr Musk tweeted: “I kinda love Etsy”. He said he bought a “handknit wool Marvin the Martian helm” for his dog. – Bloomberg/Reuters