Crypto Is Based On The Greater Fool Theory, Says Future BSP Governor


  • Medalla said that people invest in crypto only to sell it further at a higher price.
  • He mentioned that cryptocurrencies serve as a tool for those seeking to hide their money from the government.
  • Cryptocurrencies in the Philippines are classified as digital or virtual assets.

Felipe M. Medalla, the future chief of the Philippines central bank, said that one uses cryptocurrencies with the belief of selling them to someone else at a higher price, making it a very risky investment.

He further said that cryptocurrencies have the greater fool theory approach, which states that a trader can make profits no matter the buying price if there’s an even greater fool available to buy it. 

Medalla isn’t the only one who believes it, as a few days back, Bill Gates passed a similar statement saying that crypto projects like NFTs are greater-fool-theory.

Adding further, Medalla said that cryptocurrencies are a tool to hide money from the government. Mentioning the same, he said:

This is a new tool that adds to the ability to do that. There are plenty of people who want to hide their money from the government.

Bangko Sentral ng Pilipinas (BSP) does not regulate cryptocurrency; however, it has specific guidelines for virtual asset service providers who need a license from the central bank to operate.

The BSP is currently working on a pilot wholesale central bank digital currency project called CBDCPH. The project aims to test the CBDC’s feasibility for large-value transactions between selected institutions.

Moreover, it is a significant step for the country’s central bank and the finance industry to understand the opportunities and risks of wholesale CBDCs.

BSP data showed transactions in virtual currency, including cryptocurrency, surged by 71% to P105.93 billion in the first semester of 2021.Backlash isn’t new for crypto and NFTs. Recently, Taiwan’s Central Bank Called NFT Marketplace Fake and alleged it is full of fake transactions.