Sheila Bair, ex-head of the Federal Deposit Insurance Corp, a key player in the government's response to the 2008 financial crisis, says people should avoid investments in bitcoin (EXANTE: Bitcoin) as the cryptocurrency is highly volatile. In a Bloomberg Radio interview Bair said only wealthy investors should take such a risk.
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"Stay away from it. It is volatile. It is at nosebleed levels now. We do not know how sustainable that is," Bair said.
At the same time, Bair admits she is fascinated with the technology that underpins the cryptocurrency. Bitcoin's volatility gets it in the way of its "usefulness," even though its initial goal as a payment method was real, she added.
Bair comments came after Elon Musk's electric car-maker Tesla invested $1.5 billion in bitcoin. The company also announced it might accept cryptocurrencies as a means of payment.
Meanwhile, the second-largest payment network in the world Mastercard is about to allow its merchants to receive payments in cryptocurrency. While it remains unknown which cryptocurrencies Mastercard will support, it is assumed the new option will initially be allowed only for selected merchants.
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