‘Could drop to zero’: Bank of England warns of Bitcoin price

For the Bank of England , the fall of bitcoin could generate a domino effect.

For many, cryptocurrencies have become a long-term investment method, while others choose to generate quick profits and risk a little more. However, for the Bank of England, the central bank in that country, price variability could be a total loss problem at a time when conditions are uncertain due to the presence of the “Omicron” variant of COVID-19 and there are readjustments in the country’s economic outlook.

It has been the deputy governor of the Bank of England, Sir Jon Cunliffe , who has pointed out that 0.1% of the wealth of English households is invested in cryptocurrencies , a figure that is around 300 pounds for each of the 2.3 million English who bought digital currencies.

“Its price could vary considerably and, theoretically or practically, could drop to zero, ” he told the BBC . “I think the worrying point is when it is integrated into the financial system, when a large price correction can really affect other markets and established players in the financial market.”

These statements are made after the presentation of the UK Financial Stability report, which shows a 4.2% increase in the English cost of living.

Regulation before risks

For Sir Jon, the rate of growth in the value of bitcoin is “very fast” and could be inconvenient if not regulated, especially when fund managers invest in digital currencies as part of a reserve.

“We really have to roll up our sleeves and move on, so that when this becomes a much bigger problem, we have the regulatory framework to contain the risks, ” the official said.