A senior official at the Bank of England has questioned the value of Bitcoin, which soared to $68,000 last month, citing the currency’s volatility and warning that digital assets could theoretically or practically drop to zero.
According to Deputy Governor Sir Jon Cunliffe, fast-growing digital assets could pose a danger to the established financial system.
In an interview with the BBC, Cunliffe said that at present around 0.1% of British households’ wealth was held in cryptocurrencies. And, if their value was to fall sharply, it could have a knock-on effect.
Cryptocurrencies are “growing very fast,” he explained, and are being integrated into the financial system; a significant change in price could affect other markets and established financial players.
“It’s not there yet, but it takes time to design standards and regulations,” Cunliffe added.
Not everyone shares Cunliffe’s grim outlook. After reaching peak price in November, Bitcoin dropped back below $46,000 early this month. However, many experts believe the asset is on its way to passing the $100,000 mark. Bloomberg predicted earlier this year that Bitcoin could rise as high as $400,000 by the end of 2021.