What just happened? Cryptocurrencies are going through hard times right now. In addition to the price crash that wiped nearly $1 trillion from the markets, people seem to be lining up to denigrate bitcoin and other digital assets. The latest criticism came from European Central Bank (ECB) President Christine Lagarde, who said that cryptocurrency is based on “nothing” and costs nothing.

- Advertisement -

Speaking recently on Dutch television, Lagarde made her feelings about this very clear. “I have always said that crypto assets are very speculative and very risky assets,” she explained. “My very modest assessment is that it is worth nothing. It is not based on anything, there are no underlying assets that could serve as a security anchor.”

- Advertisement -

Lagarde’s comments come at a time when the cryptocurrency is in a major crisis. The collapse of Terra and its Luna support coin earlier this month destroyed the value cryptocurrency markets that are facing additional pressure from increased regulatory scrutiny and a war between Russia and Ukraine. The price of Bitcoin has fallen by almost 50% from six months earlier, and the price of Ethereum has fallen by about 42% over the past month.

However, Lagarde is not a complete cryptoskeptic. She also spoke about the ECB’s digital euro project, which is expected to appear in the next four years. “The day we have a central bank digital currency, any digital euro, I guarantee – so the central bank [be] behind it, and I think it’s very different from a lot of other things,” she added.

While the president of the ECB admitted that she practiced what she preached without owning any crypto assets herself – although she watches them “very closely” – one of her sons invested, against his mother’s advice. “He is a free man,” she said.

The comments come shortly after Sam Bankman-Fried, cryptocurrency billionaire and founder/CEO of crypto exchange FTX, said that he sees no future for Bitcoin as a payment network. He criticized BTC’s proof-of-work system for its high environmental costs and inefficiency.

h/t: bloomberg