Minneapolis Federal Reserve President calls crypto a “garbage dumpster”

In the Montana Eco 2020 event that took place recently, Minneapolis Federal Reserve President Neel Kashkari spoke out against the utility of cryptocurrencies. Even as a form of an investment asset, Kashkari remarked that he wouldn’t gift Bitcoin to his 1-year-old daughter. He said he would choose Treasury bonds instead. The Minneapolis Fed President called cryptocurrencies a “garbage dumpster,” while praising the US dollar.

The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar. In the virtual-currency and cryptocurrency world, there are thousands of these garbage coins out there. Literally, people have been fleeced for tens of billions of dollars, and finally the SEC is getting involved in cracking down on this.

Despite these statements, Bitcoin was the best performing asset of the last ten years. It ended 2019 with an 85% year-to-date (YTD) gain while bond yields struggled during the same time. While Kashkari did concede that useful crypto utility might emerge in the next ten to twenty years, he felt that the current state of the market leaves more to be desired.

The barrier to entry to creating a new cryptocurrency is zero. I’m seeing more noise and more fraud than I’m seeing anything useful.