Even though Bitcoin, Ethereum, and meme coins like Dogecoin and Shiba Inu continue to attract massive amounts of global attention and investment, Reserve Bank of India (RBI) Governor Shaktikanta Das has issued yet another caution about cryptocurrencies today.
Das cautioned investors about the risks of investing in cryptocurrencies and the threat they pose to the financial system as a whole. Today, Das stated that cryptocurrencies are a significant source of concern in terms of both macroeconomic and financial stability.
The ball is now in the hands of the central government, which has yet to decide.
The RBI governor’s remarks came only days after numerous investors lost millions of dollars in an apparent fraud using Squid coin, which is based on the famous Netflix show Squid Game. Also, as investors increasingly flock to the crypto realm, the biggest of them all, Bitcoin, has been hitting new highs. On Tuesday, Bitcoin reached a new high of $68,513. According to Bloomberg, the entire market capitalization of all cryptocurrencies has surpassed $3 trillion.
Anonymous coders created squid coin with no ties to Netflix, and its value skyrocketed in days. The developers shut down their activities as millions of dollars came in, causing the coin’s value to collapse to zero. They got away with roughly $30 million, which was the peak of the coin’s market value before the crash. The con is a ‘rug-pull,’ since it involves a rug being yanked out from under an unsuspecting victim.
Before investing their money, investors failed to investigate the developers and their activities thoroughly.
There were numerous red flags they should have spotted, including that they were not permitted to sell their coins.
Many observers believe that investors looking for a hedge against inflation are largely to blame for cryptocurrencies like Bitcoin and Ether reaching all-time highs.
According to Bloomberg, cryptocurrency dangers are also visible in other ways, as evidenced by Coinbase Global’s stock dropping over 12% in postmarket trade. After hitting a rough patch during the summer, the largest U.S. digital-asset exchange posted lower-than-expected results when the cryptocurrency market plummeted.