In a recent statement, the Bank of England Governor, crypto critic Andrew Bailey said:
“I would only emphasize what I’ve said quite a few times in recent years, [and] I’m afraid they (cryptocurrencies) have no intrinsic value,”
So, how do we measure the “Intrinsic Value” Of The Company? Well, according to investopedia.com:
“There is no universal standard for calculating the intrinsic value of a company. In the end any such estimation is at least partly subjective.”
So, this statement is something that should be taken with a grain of salt. Sure, there are plenty of crypto currencies with no intrinsic value. Take Dogecoin, for example. If every crypto were like Dogecoin, Bailey would be 100% spot on here. However, he couldn’t be more wrong. There are several dozen minimum unique types of crypto assets with real world value proposition. Of course one has to spend time in the crypto and blockchain world to see where the value comes from.
Why Crypto Critic Andrew Bailey Is Wrong
For example, one new cryptocurrency that launched in April has figured out a way to merge the blockchain and crypto industries. The company is called Melalie. It’s like Uber except without intermediaries link banks being involved with transactions.
So, there are many examples of cryptos which you could argue have intrinsic value. Additionally there are many other projects on the market that are working products right now. Take AIOZ, for example, which we wrote an article about last month. AIOZ is a decentralized video streaming service.
For the Governor to Say that there is no intrinsic value to any crypto is an inaccurate and not well thought out statement. Of course one can only see the used cases of crypto if one spends time in the blockchain and crypto world. It is difficult for example to see the value of ETH until you interacted with the Ethereum network. For an outsider this would of course never make sense.
In further comments, Andrew Bailey said:
“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,”
Yes, he does have a point. Investing in cryptocurrencies are the riskiest class of investments one can make with how young the crypto industry is, therefore making the assets highly volatile and experimental. But – this does not mean they are meaningless.
Bailey also warned that you should be prepared to lose all of your money. Is this is the institutions way of discouraging people from buying crypto? What if when the demand effects the market, the bank will likely buy up the Bitcoin at a low price while everyday investors panic sell. It’s a possibility to be aware of and something we have seen too often in the financial markets. Whenever institutions warn about cryptocurrency, the price still continues to grow.
Additionally, the UK Revenue has released statements that they will be cracking down on those in the UK who are evading crypto taxes. So, institutions right now are trying to cause fear and doubt to cryptocurrency investors.
There is no way of coming to a full objective analysis of a company’s intrinsic values. However, there are many types of crypto which you could argue have high value propositions and utilities to offer. However, in order to see this you have to take a deep interest into the crypto space in the first place. Only then you can see how some cryptocurrencies have an actual use in the blockchain space.
Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.