Tesla’s $ 1.5 billion purchase of Bitcoin may have pushed cryptocurrencies on the radar of major financial institutions. However, these companies may not have included cryptocurrencies in their balance sheets.



Chi Lo: “Bitcoin is a tool for speculators and its price will fall”

This is one of the implications of Chi Lo, BNP Paribas Asset Management Senior Strategist. According to the manager, “crypto prices will eventually fall” triggered by a change in monetary policy or regulations.

In a blog posted on the BNP Paribas website, Lo discussed the growing popularity of cryptocurrencies as an asset class and criticized their use as currency. According to Lo, Bitcoin is not money, not a store of value, but rather a “tool for speculators”.


“Fixed supply is not as innocent as thought, it creates problems”

The analyst believes the rationale behind Bitcoin’s popular “store of value” narrative is that the fixed supply of Bitcoin is a problem for the asset and does not benefit.

“Contrary to the traditional belief that limited Bitcoin and crypto supply is a benefit and preserves value, it is actually a big problem for them to be viewed as money.”

The maximum number of Bitcoins that can be mined is 21 million. In the blog in question, Lo claimed that these supply restrictions made cryptocurrencies inappropriate as legal tender, because a static money supply would deprive central banks of the ability to implement anti-cycle policies.

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“State intervention is not even a business”

The strategist’s last argument for his case against cryptocurrencies was that countries would take steps to protect their monetary systems and currencies and their ability to tax and manage the economy.

“The more people believe that cryptocurrencies are money, the greater the risk of government intervention in this market,” said the strategist, adding that the emerging trend of official digital currencies is a sign that central banks are opposing this trend.


China launches its own digital currency

While crypto advocates have a long list of counter-arguments against Lo’s statements, what they say about government intervention may make sense. In countries like China, private cryptocurrencies are not currently welcome. The country is in the process of issuing its own CBDC on a larger scale very soon.

Banks like BNY Mellon, on the other hand, are supporting cryptocurrencies that have recently offered custody solutions for digital assets. Given the strategist’s thoughts on the matter, it seems unlikely that BNP Paribas will do the same in the near future.


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