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Highlights
- Bank of England has said that Bitcoin could be “worthless” going ahead.
- The central bank has also issued a warning to the investors saying that they should be prepared to lose everything.
- The central bank also raised aspersions over Bitcoin’s inherent
While Bitcoin has only been around for just over a decade, it has already garnered a reputation as an investment craze. The exchanges across the world say that the average age of investors has fallen even as their investments have gone up – clearly summing up the demand for the popular cryptocurrency.
However, not all are enthused. The latest entrant in the list to question the potential of Bitcoin is England’s central bank. Bank of England has said that Bitcoin could be “worthless,” and investors should be prepared to lose everything.
The central bank also raised aspersions over Bitcoin’s inherent worth. The world’s largest digital currency has surged to US$50,000 a piece in value this year. In November, Bitcoin had surged past US$67,000. However, it witnessed a sell-off just after reports of the Omicron variant surfaced.
The central bank should be prepared for risks associated with the surge of the cryptocurrency following fast growth in its popularity, said Bank of England’s Deputy governor, Jon Cunliffe. “Their price can vary quite considerably and [Bitcoins] could theoretically or practically drop to zero,” BBC reported Cunliffe as saying.
Nearly 0.1% of the wealth of the UK’s households is stored in Bitcoins and other crypto assets.
Source: © Aoutphoto | Megapixl.com
Meanwhile, the financial policy committee of the bank, which monitors financial risks to the economy, said earlier this week that there was little direct threat to the stability of the UK financial system from crypto assets. However, it also issued a warning that the fast growth of the cryptocurrency could result in it becoming more linked with traditional financial services and posing several risks.
Meanwhile, the cryptocurrency market extended its losses on Tuesday ahead of the much-awaited US Federal Reserve meeting as investors awaited signals for tapering and rate hikes. The global crypto market capitalisation fell over 5% to the US$2.13-trillion mark compared to the previous day’s trading. However, the total crypto market volume zoomed as much as 38% to US$97.03 billion.
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