Bitcoin down as Sweden’s central bank compares it to ‘trading in stamps’

Sweden's Riksbank Governor Stefan Ingves said 'private money usually collapses sooner or later'. Photo: Getty Images

Sweden’s Riksbank Governor Stefan Ingves said ‘private money usually collapses sooner or later’. Photo: Getty Images

Cryptocurrencies were broadly down on Friday as Swedens central bank governor said bitcoin could eventually collapse.

Bitcoin (BTC-USD) was down roughly 1%, to trade at $45,918 (33,090) while Ethereum (ETH-USD) tumbled 4.5% to trade at $3,373.

Bitcoin, hit by regulatory crackdowns and concerns over the environmental impact of mining it, had fallen below $50,000, after reaching all-time highs of $63,000 in April.

It managed to claw its way past the $50,000 mark earlier this week but has since tumbled again.

This was despite the fact that Twitter and Reddit users tried to push up the price on bitcoin day to celebrate El Salvador’s acceptance of the crypto as legal tender. The rollout was fraught with issues including protests from citizens and tech glitches.

Bitcoin’s woes come as Riksbank Governor Stefan Ingves was reported by Bloomberg as saying: Private money usually collapses sooner or later. And sure, you can get rich by trading in bitcoin, but its comparable to trading in stamps.”

Bitcoin's price ticked lower on Friday morning. Chart: Yahoo Finance UK

Bitcoin’s price ticked lower on Friday morning. Chart: Yahoo Finance UK

Investors are cautious about the current fluctuations in bitcoin and ethereum, especially as these benchmarks failed to trim earlier losses, which is usually considered a sign of weakness in the crypto market, Wael Makarem, senior market strategist at trading broker Exness told Yahoo Finance UK.

On the other hand, the headlines from EU regulators coming closer to implementing new regulations for cryptocurrencies, new anti-money laundering rules and tax reporting requirements adds downside pressure. Investors are afraid of tough rules and regulations that could limit the adoption or use of crypto, he added.

On Thursday, the European Central Bank said it will slow the average pace of asset purchases but will keep the overall size of its quantitative easing program intact.

Some analysts say cryptocurrencies have benefited from the liquidity-boosting programmes launched by global central banks.

Read more: European markets rise as UK economy recovery slows

Meanwhile, one expert has said the price of cardano (ADA-USD), the third biggest cryptocurrency behind bitcoin and ethereum, will beat its all-time highs by the end of the year, reaching $4 by the end of 2021. 

“Its price has increased by around 1668% during the year so far. This impressive momentum is set to gain further pace as we move towards the end of the year,” said Nigel Green, CEO of financial advisory firm deVere Group.

This prediction comes ahead of Cardanos tech upgrade on 12 September.

“This overhaul will allow smart contracts to be built on the network, making the Cardano blockchain even more attractive to even more users,” said Green.

“The major upgrade will give those who dont necessarily have technical backgrounds the opportunity to create smart contracts pieces of code that allow individuals to enter financial agreements without the need for a centralised party.

Watch: What is bitcoin?