Jim Yong Kim is the president of World Bank Group. He is also the top European Central Bank policymaker. It is safe to say that his comments will carry weight.
During an event in Washington, World Bank Group President Jim Yong Kim predicted a strong relevance between cryptocurrencies and Ponzi schemes; He said: “In terms of using Bitcoin or some of the cryptocurrencies, we are also looking at it, but I’m told the vast majority of cryptocurrencies are basically Ponzi schemes.” Despite his bearish calls, investors seem to still be cheering the lenient stance from U.S. regulators, and the bulls don’t want to lose the momentum they generated in the last two days.
So Bitcoin (BTC) price continues to trade around $8,200 after hitting the three month low of $6,000 on Tuesday. It dipped to around $7,700 overnight amid investors profit taking.
World Bank Group President Compared Cryptocurrencies with Ponzi Schemes
Despite the fact that U.S. regulators had presented positive and negative opinions before the Senate Committee, cryptocurrencies still fail to impress the top-rated fund managers and central banks; they aren’t too optimistic about cryptocurrencies and their future potential.
Showing his concern about bitcoin and other cryptocurrencies being Ponzi schemes indicates Kim’s bearish stance. His remarks support the case of bears, who believe there is no underlying value for cryptocurrencies; they will ultimately crash to zero.
And Kim is not alone. The head of the Bank for International Settlements, Agustín Carstens, has also criticized bitcoin and cryptocurrencies on Monday saying: “Bitcoin is a combination of a bubble, a Ponzi scheme, and an environmental disaster.”
The European Central Bank Policymaker Supports Clampdown
And there’s even more bearish sentiment coming from Yves Mersch, a member of the ECB’s executive board. He supported Agustín Carstens remarks, calling cryptocurrencies a threat to global financial stability; “We at the ECB are fully in line with Agustín Carstens views and we have similar worries.”
Bitcoin Stable, But Others Fell
Despite such strong bearish calls from top policymakers, bitcoin’s investor confidence was not shattered – at least in early trading today. However, Ripple (XRP), Ethereum (ETH) and Litecoin (LTC) failed to sustain gains; all three declined in value compared to the previous day. Bitcoin Cash (BCH) on the other hand, is a different story for investors; its price soared close to 18% following the news that OpenBazaar has added support for the coin.
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