The son of the European Central Bank (ECB) President Christine Lagarde has suffered a huge loss in his crypto investments after ignoring his mother’s advice to stay away from the volatile assets. According to Lagarde, her son lost “almost all” of his crypto holdings, which amounted to 60% of his investments.
Lagarde’s Anti-crypto Stance
Lagarde is known for criticizing cryptocurrencies, notably Bitcoin, deeming it as having no value and grounded on nothing. She additionally voiced worries about the environmental effects, illegal activities, and government issues presented by digital assets.
During her tenure, the ECB has taken on a project researching the feasibility of introducing a digital euro. This central bank digital currency (CBDC) could potentially rival digital assets.
Lagarde spoke about her son’s unfortunate experience at a student meeting in Frankfurt as they explored the future of digital finance. She shared how her son, at first, overlooked her caution about digital assets. He later conceded she was correct when most of his cash was lost. She commented:
I have, as you can tell, a very low opinion of cryptos. People are free to invest their money where they want, people are free to speculate as much as they want, (but) people should not be free to participate in criminally sanctioned trade and businesses.
Crypto Market Turmoil
In November 2021, crypto markets took a hit. Bitcoin’s value, along with others, fell by over 50%. Factors leading to the drop included FTX, a major crypto exchange, going bankrupt, a US dollar-linked stable coin, TerraUSD, collapsing, and rules tightening in China, America, and Europe.
This fall revealed the crypto world’s instability, closely controlled, untransparent, and unregulated nature. Many investors were shocked by the quick shifts in the market, leading to heavy losses. A report by the European Systemic Risk Board showed that about 75% of Bitcoin users lost money on their first investments.
The ECB reported that the Governing Council, in two years, will make a decision. They’ll determine if they are ready to progress to the next phase. This stage involves organizing everything necessary for potentially releasing a new digital euro in the future.
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