St. Louis Fed's Bullard: Most cryptocurrencies are 'worthless'

Brian Cheung
·Anchor/Reporter
2 min read
134
In this article:

A top U.S. central banker warned Monday that investors should be careful when investing in cryptocurrencies.

Federal Reserve Bank of St. Louis President James Bullard said Monday that crypto assets have a use case for facilitating transactions that are difficult to make with fiat currencies. But he suggested that there may be too many types of private cryptocurrency projects out there.

“We have a couple of thousand of these around, most of them are worthless,” Bullard told Yahoo Finance in an exclusive interview.

[Read the full transcript here.]

Bullard’s remarks come as crypto markets continue to teeter. At the worst point during this past week of selling, Bitcoin prices were off by more than 50% from their peak of more than $64,800 from mid-April.

Asked if he saw financial stability risks in crypto asset valuations, Bullard said he feels investors understand the risks.

“I think for the most part, people are going into this with eyes wide open, they're certainly not blind to the idea that this is a volatile area,” Bullard said, adding that investors should be “careful” when taking on risk.

Fedcoin?

Fed officials are being cautious with their messaging on cryptocurrencies, since the central bank itself is considering the creation of a stablecoin for the U.S. dollar.

In a speech Monday, Fed Governor Lael Brainard said the central bank is “stepping up its research and public engagement” on a possible U.S. digital dollar.

“By introducing safe central bank money that is accessible to households and businesses in digital payments systems, a [central bank-issued digital currency] would reduce counterparty risk and the associated consumer protection and financial stability risks,” Brainard said.

The Fed is conducting research with the Massachusetts Institute of Technology on possible designs, with additional projects exploring the financial inclusion implications of a digital dollar.

But Fed officials are clear that they have not yet made a decision on whether or not they will ultimately adopt a “Fed coin.” Goldman Sachs Chief Economist Jan Hatzius told Yahoo Finance Monday he thinks the Fed will likely end up creating a digital currency to keep up with other central banks launching their own.

Later in the summer, the Fed will release a paper outlining the central bank’s thinking on the pros and cons of a digital dollar. The Fed will then solicit public feedback before deciding on “whether and how to move forward” with a U.S. central bank-issued digital currency.

“We've got a lot going on,” Bullard told Yahoo Finance on the project.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit

Advertisement

Recommended Stories

  • Homes are overvalued in much of the U.S. — with these 5 states leading the list

    Home prices are overvalued nationally, according to a new report by Fitch Ratings, led by Southern states.

  • My father ‘deliberately and hurtfully’ cut my late sister’s two kids out of his will. How can I ensure they get their fair share?

    “How can I best do this in such a way that nobody is penalized from gift taxes and other costs?”

  • 'Should I Buy All My Kids A House?' Widow Uncertain After Husband's Death, Asks Dave Ramsey About Purchasing Homes For Her 3 Adult Children

    During a discussion on the Dave Ramsey Show, titled "Should I Buy All My Kids A House?" a widow from Denver, Colorado, named Kay, shared her intentions to buy homes for her three adult children following her husband’s passing from cancer. This act of generosity, spurred by a substantial financial legacy, prompted a mix of emotional and practical financial considerations, which Ramsey addressed with his usual caution and insight. Don't Miss: 82% of Americans aren’t using this government secured 5

  • 'Which Bucket Do I Draw From First?' Suze Orman Explains To 67-Year-Old The Best Order For Tapping Into Her Retirement Accounts

    When Ellen, a 67-year-old retiree, reached out to Suze Orman during her podcast, she had a straightforward yet crucial financial inquiry: "Which bucket do I draw from first?" Ellen, whose Social Security covers most of her daily living expenses, needed guidance on how to use her different types of retirement accounts for additional expenditures like travel. Don't Miss: The recommended retirement savings amount is $550K, but here is why so many Americans are falling short. Reddit user reveals his

  • Dow Jones Rises After Hot Inflation Data, Powell Next; GameStop Rockets 112%

    The Dow Jones rose Tuesday on the stock market today on hot inflation data. Fed Chair Jerome Powell is next. GME stock rocketed 112%.

  • Warren Buffett "Guaranteed" He'd Get 50% Annual Returns With Only $1 Million As Berkshire's Cash Hoard Soars To Over $189 Billion

    Legendary investor Warren Buffett has long advocated for the average investor to regularly put money in an S&P 500 index fund rather than buying actively managed funds. However, that's not to say he doesn't think massive outperformance isn't possible. As far back as 1999, Mr. Buffett famously said he could achieve 50% annual returns if he had only $1 million to manage, stating, "The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But

  • Is There Actually an RMD Cut-Off Age?

    Required minimum distributions (RMDs) are the minimum amount that you must withdraw from certain tax-advantaged retirement accounts. They begin at age 72 or 73, depending on your circumstances and continue indefinitely. There is, unfortunately, no age when RMDs stop. You … Continue reading → The post At What Age Do RMDs Stop? appeared first on SmartAsset Blog.

  • A Way To Go Bullish On Nvidia Earnings With Limited Risk

    Nvidia is due to report earnings on Wednesday after the closing bell, and the options market is pricing in an 10.2% move in either direction. Nvidia stock has stayed above the lower expected range following all six of the last six earnings announcements. Now that we know the expected range, let's find a bull put spread that has the short strike roughly 10.3% below the stock price.

  • Southern States Sink As Seriously Underwater Home Mortgages Rise

    According to a report released on May 9, 2024, the number of properties classified as seriously underwater is ticking up, with southern states bearing the brunt of the phenomenon. One in 37 homes with mortgages was considered seriously underwater during the first quarter, according to real estate data provider ATTOM's 2024 U.S. Home Equity & Underwater Report. That's up from one in 38 homes during the fourth quarter of last year. A mortgage is considered seriously underwater when the estimated l

  • SunPower Stock Doubles in Meme-Craze-Fueled ‘Short Squeeze’

    (Bloomberg) -- Heavily shorted SunPower Corp. shares more than doubled at one point on Tuesday, putting them on track for a record gain, as the stock of the solar power company got caught up in the latest meme-stock frenzy.Most Read from BloombergTrump Vows ‘Day One’ Executive Order Targeting Offshore WindBiden Accuses China of ‘Cheating’ on Trade, Imposes New TariffsFlood of China Used Cooking Oil Spurs Call to Hike US LeviesMacron Puts French Banks in Play With Plan to Transform EuropeHow One