What is Bank of England’s (BoE) prophecy on crypto survivors?

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What is Bank of England’s (BoE) prophecy on crypto survivors?

 What is Bank of England’s (BoE) prophecy on crypto survivors?
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Highlights

  • BOE’s deputy governor Jon Cunliffe drew comparisons from the recent crypto market crash to the dot-com crash, stating the survivors may evolve into Amazons and eBays of tomorrow.
  • Cunliffe said that even if the cryptocurrency market crashes, the crypto technologies and finances will continue to flourish.

The overall bearish crypto market, coupled with the Terra (LUNA) crash, has left the market participants in constant fear of severe losses or going bankrupt. Several crypto companies have further dented the confidence of investors by reducing their workforce.

As of 24 June, the overall crypto fear and greed index stood at 11, indicating extreme fear among investors. The overall crypto market on Friday stood at US$950.82 billion with volume of US$67.40 billion. 

Though everything sounds crumbling for the market, the Bank of England (BoE) believes that the survivors of such a market could well be on their way to becoming crypto kings in the future.

Related read: Why Ethereum's Gray Glacier network is vital for its protocol

While Bitcoin, Ethereum, Cardano etc. have all lost 70-80% in value since they achieved their all-time highs, there have cryptos such as Polygon, UNI etc., who have managed to gain during this bearish trend.

BoE deputy governor Jon Cunliffe drew comparisons from the recent crypto market crash to the dot-com crash, suggesting the survivors could evolve into the Amazons and eBays of tomorrow.  

What did BoE say exactly?

The dot-com boom happened after the US$5 trillion wipe-off, which led to several companies going bust. That period saw the rise of many tech companies, which established themselves as major key market players.

Cunliffe said that even if the cryptocurrency market crumbles, the crypto technologies and finances will continue to flourish, bringing in increased efficiencies and changes in the market structure.

Related read: Voyager crypto is witnessing a decline of over 15% today. Here's why 

The Bank of England has often taken a grim view of cryptos and has always highlighted the risks associated with it. Cunliffe said that the central bank will only come into the picture if it decides to be a stablecoin issuer.

In May this year, UK Treasury said that it will be regulating the stablecoins as a legal tender. Central Bank governor Andrew Bailey. in fact, had suggested last year that it’s time that stablecoins are regulated just the same way as other payment mediums.

The matter got further wind following the recent stablecoin collapse, following which the market saw several billions getting wiped off.

Conclusion

With Terra (Luna) now relaunching in a new avatar, the token has made significant headway and it would be safe to say has managed to stabilize itself for the time being. However, for the revival to happen, the investors might have to wait for some more time and have to sail through this bearish phase.

Even last year, sluggish market movements persisted till September/October, before it saw a revival. Having said that, it is important crypto enthusiasts do their market research before making investment decisions.

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