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Bank of Sweden Governor: Bitcoin is highly volatile and lacks regulation, and investors should be careful

Stefan Ingves, chairman of the Basel Committee's global regulator and head of the Bank of Sweden, said: "There is a real risk of investing in Bitcoin today. If you look back at what happened in the past century, things like tulips or something like that, when they reach that altitude, how likely it is to continue. This will probably disappoint those who still have illusions about it.

When asked whether encrypted cryptocurrencies such as bitcoin triggered financial stability, Stefan Ingves said to CNBC: "I think it is wrong to call it a cryptocurrency, which is a Kind of encrypted thing, but definitely not a cryptocurrency. "

Stefan Ingves argues that investing Bitcoin and other similar digital currencies is dangerous. He urged traders to exercise caution because of the very high market volatility and the lack of support from central banks or from international regulators.

According to industry site CoinDesk, the transaction price of bitcoin was about $ 16,029 last Friday morning, after a few days of wild price fluctuations. On Thursday, bitcoin soared to more than $ 19,000 in Coinbase's trading, before plummeting.

Bitcoin trading platform Coinbase is usually more expensive than other platforms. Coinbase is one of the major crypto currency exchanges, accounting for one-third of the volume of Bitcoin transactions.

"If people can look at what happened in the past and realize that there is only tulip in the price that can soar to this heights, they are naturally going to oppose those who are still perpetrators." Stefan Ingves )Say.

Tulip fanaticism

Stefan Ingves is not the first to compare the rapid rise of bitcoin with tulip fever, and many people generally consider bitcoin a financial bubble.

In the 17th century, tulips became a precious commodity traded on the stock exchange in the Netherlands. When many people sell other properties to get involved, everything is over. The sudden drop in prices sparked a panic sell-off, and the price of tulips fell to the bottom quickly, leaving many investors in deep trouble.

Bitcoin's market value has soared by more than 250 billion U.S. dollars recently, which means it can match the market value of 20 of the S & P 500's largest stocks.

Old-fashioned banking

Meanwhile, on Thursday, financial regulators reached a long-term agreement to coordinate global banking. The Basel Committee, comprised of banking regulators at the world's top financial centers, adopted new regulatory rules to strengthen banks' help after the financial crisis. These rules aim to ensure that banks manage capital across the world at levels consistent with measures of risk assessment.

"International regulators have a" very high level of awareness of developments in financial technology, "but it's still too early to say about the regulatory framework," said Stefan Ingves.
"I also want to emphasize that sometimes people talk about financial technology, there will be some speculation that they think the old-fashioned banking business will disappear, but I think this will not happen, because regardless of the existing technology is what, in most Our country, our bank has been hundreds of years old, and most likely it will continue like this, "he added.