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IMF Managing Director Kristalina Georgieva on Cryptocurrencies: It’s Not Money
Cryptocurrencies’ last big moment also deserves a big reminder.
The US dollar is still the US dollar and cryptocurrencies are, well, just an investment vehicle.
Said memo comes with compliments from the International Monetary Fund (IMF), a leading global authority on payments and financial stability.
“Our view is that we need to distinguish between money and assets. When we talk about cryptocurrencies, we are actually talking about an asset class. It may be supported and, in that sense, safer and less risky, or it may not be funded. and, therefore, a riskier investment. It’s not exactly money, it’s more like a money management fund,” IMF Managing Director Kristalina Georgieva told Yahoo Finance Live.
Georgieva’s comments came just hours before the SEC cleared the way for ‘s debut new bitcoin-backed spot ETFs last week.
Regulators have given the green light to financial institutions as By Cathie Wood Ark and Black Rock (BLK) to debut these new ETFs. A total of 11 spot Bitcoin ETFs have been approved.
Average investors will now be able to gain exposure to the world’s largest cryptocurrency without having to own it. Cryptocurrencies in your 401k? Hey, if you want this risk and you can sleep at night.
The ETFs began trading last Thursday, with the cryptocurrency world now turning its attention to potential ethereum ETF approvals this spring.
It’s a big moment for the cryptocurrency industry, which has endured boom and bust periods over the past five years and the fall of prominent leaders, FTX’s Sam Bankman-Fried and Binance’s CZ.
“Our simple advice to all investors is: buy on the dip and focus on the new cycle of bitcoin adoption. Small sell-offs are opportunities ahead of the asymmetric rally ahead,” the Bernstein analyst said Gautam Chhugani in a client note reviewed by Yahoo Finance.
Coinbase Chief Financial Officer Alesia Haas he told Yahoo Finance Sean Smith that it was “a seminal day for cryptocurrencies,” but “this is a long journey and this is just one step along the way” in an effort for cryptocurrencies to gain more widespread acceptance.
Haas believes the bitcoin spot ETF approval will “invite trillions of dollars who were previously unable to access crypto assets and were unable to access bitcoin.”
Despite the latest hoopla over bitcoin, the IMF’s Georgieva doesn’t believe the day is approaching when the cryptocurrency can rival the dollar in stature.
“Look, this day, if it exists, is so far in the future that I think it’s not very useful to talk about it. Why is the dollar a dominant currency today? Because of the size of the American economy and, more importantly, the depth of the dollar markets capital in the United States,” Georgieva explained, comparing the characteristics of the dollar with other major global currencies.
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“So I, for one, am in no rush to turn my dollars into another currency. That doesn’t mean you shouldn’t, you know, diversify. But I wouldn’t worry too much about [bitcoin rivaling the dollar]. There are things that make me lose sleep, but that’s not one of them.”
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Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on Twitter/X @BrianSozzi and so on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
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