Philip Hammond – former Chancellor of the UK and an ex-member of the Conservative Party – believes people should be extra cautious when entering the cryptocurrency space. He said that institutions, despite recognizing the asset class, have only dipped their toes in terms of investing.
In October this year, former Chancellor Lord Hammond became a senior advisor at Copper – a British cryptocurrency custody firm that provides infrastructure for the institutional digital asset investment community. Although he is part of the world of bitcoin and alternative coins, he would not recommend allocating large amounts of funds into the asset class.
He outlined that there are numerous companies and institutions that have entered the cryptocurrency market. However, the majority of them have only “dipped their toes,” as the industry is still highly volatile.
“But it is dipping a toe – it’s a tiny proportion of their asset base exposed to what is a highly volatile asset class.”
In his view, people should keep in mind that fact and have a small exposure to digital assets describing the investment as “gambling money.” Moreover, Lord Hammond opined that a large chunk of society sees it closer to “gaming than a serious investment.”
In October, the American TV personality Jim Cramer admitted his reason to invest in bitcoin and ether was related to gambling:
“I was simply gambling on crowd psychology, though, and I have no idea whatsoever why these things went up.”
It is worth noting that many other prominent names such as Michael Saylor, Saifedean Ammous, Mayor Francis Suarez, Senator Synthia Lummis, and more are firmly in favor of the cryptocurrency industry, more specifically bitcoin. According to them, the primary digital asset will be the best investment solution in the future monetary chaos that is expected to occur.
Apart from urging people to beware when investing in the asset class, Hammond said the “distributed ledger technology” (DLT), which underpins cryptocurrencies, will “eventually encompass the whole of what we currently think of as financial services.”
A Competitive Edge
Despite slamming crypto investing as gambling, Hammond also urged the UK authorities to switch their focus from Brexit to digital currencies earlier this month. He argued that by doing so, the kingdom could secure its financial status since bitcoin and altcoins will become more and more adopted on a macroeconomic level:
“I personally think the momentum is now unstoppable. We need to move quickly and effectively to secure London’s position.”
The ex-Chancellor warned that ignoring the asset class is not wise as many European countries have already embraced it.
“If we don’t watch carefully, we will find some surprising people are ahead of us,” he concluded.