Bitcoin’s Moment
Bitcoin’s climb past the $100,000 mark is a watershed moment in the evolution of crypto-currencies, symbolising their growing acceptance as a legitimate asset class.
Bitcoin and other cryptocurrencies could cause the next financial crash, according to a top Bank of England official, Daily Mail reported.
Deputy Governor Sir Jon Cunliffe said a massive collapse in the price of cryptocurrencies to as low as zero is ‘certainly a plausible scenario’ and that there was ‘a possibility of contagion’ across the global financial sector.
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As per the report, Cunliffe said the hit to individual investors if cryptocurrencies collapse would be unlikely to cause a ‘financial stability risk’. But he added: ‘The picture is less clear for financial institutions.’
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He compared a possible crypto crash with other financial meltdowns, and highlighted that the crypto market is now worth �1.7 trillion, larger than the subprime mortgage market in 2008 when it collapsed.
As the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems.’
Cunliffe said regulation of cryptocurrency ‘needs to be pursued as a matter of urgency’.
‘When something in the financial system is growing very fast, in a largely unregulated space, financial stability authorities have to take notice.’
The value of the cryptocurrency market has increased by 200 per cent this year.
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