Even those who really should know better are not immune to losses by speculating in cryptocurrencies: ECB President Christine Lagarde admitted on Friday in Frankfurt that one of her two sons had gambled away cyber currencies. “He royally ignored me, which is his privilege,” she said. Lagarde is considered a strong critic of cyber currencies. “He lost almost all the money he invested.”
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It wasn’t a lot of money; he lost about 60%. “When I had another conversation with him about it, he reluctantly accepted that I was right,” she noted. The central bank chief did not say which of her children, both over 30, made the mistake.
“As you can see, I have a very negative opinion about cryptocurrencies,” Lagarde noted. Everyone has the right to invest their money wherever they want. And everyone can speculate as much as they want. But she added: “No one should have the right to participate in criminally sanctioned trade and business.” In the past, Lagarde has always advocated strong regulation of cybercurrencies in order to protect consumers and prevent criminal activities such as money laundering and terrorist financing.
Last year, the European Union (EU) became the first major economic region to reach agreement on cryptocurrency regulation. The framework, called “Markets in Crypto Assets” (MiCA), came into force in June this year. However, full implementation of the regulation is expected to take place by the end of 2024. From Lagarde’s point of view, the MiCA regulation should only be a first step. She has repeatedly advocated for global regulation of cybercurrencies.
Bitcoin rises to US$38,000
Meanwhile, the price of the oldest and most well-known cryptocurrency, Bitcoin, surpassed the $38,000 mark (almost 34,900 euros) for the first time in a year and a half. A peak of $38,016 was marked on the Bitfinex trading platform. This is the highest level since May 2022. Other digital stocks, such as the second-largest cryptocurrency by market cap, Ether, also rose.
Bitcoin and Co price increases are actually occurring in a rather unfavorable market environment. Major trading platform Binance recently admitted violations of money laundering laws and paid a billion-dollar fine in a settlement. Similar to the spectacular collapse of leading platform FTX about a year ago, the incident further damaged the crypto scene’s already tarnished reputation.
However, digital currencies have been benefiting from two other developments for some time now: Firstly, the approval of a Bitcoin-based ETF fund in the US appears to be imminent. For weeks now, anticipation among crypto fans has been creating anticipation and prices have been trending upwards. Because approval will result in greater demand for Bitcoin.
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There is also a prediction that the main central banks may have reached the end of their interest rate hikes. In particular, the US Federal Reserve is not currently taking any major steps to continue its fight against inflation by further tightening interest rates. The development benefits risky investments such as digital currencies because interest-bearing securities such as government bonds do not become even more profitable in a stable interest rate environment.