There has been a lot of misconception about the utility of Bitcoin, especially from lawmakers. Back in January 2021, Treasury Secretary Janet Yellen angered the crypto community when she said that Bitcoin and other cryptos were mainly used for illicit financing. Although she later backtracked on her earlier comments, several others have aired their reservations over Bitcoin’s place as a financial instrument.
Former Fed Chair Dr. Ben S. Bernanke is one of the latest to voice his disapproval of the flagship cryptocurrency as an alternative form of money.
In a last week interview on CNBC’s “Squawk Box,” Bernanke, who is a distinguished senior fellow with the Economic Studies program at the Brookings Institution, noted that Bitcoin was a purely “speculative asset.” While gold has an underlying value since it can be used to “fill cavities,” Bernanke noted that “the underlying use value of a Bitcoin is to do ransomware or something like that.”
One of the other risks that Bitcoin has is that it could at some point be subject to a lot more regulation. And the anonymity is also at risk, I think, at some point. So, you know, investors in Bitcoin should be aware of that.
Bernanke has been skeptical of digital assets. As far back as 2013, he wrote a letter to the Homeland Security committee stating that cryptocurrencies could pose serious risks to law enforcement.