Bank of England warns crypto prices are falling to zero
Doomsday given by the deputy governor of the Bank of England, who says crypto prices could plummet to zero.
The Bank of England’s deputy governor for financial stability is called Sir Jon Cunliffe. And he has warned that the price of cryptocurrencies, including Bitcoin, could drop to zero. He noted that the crypto industry is “growing very fast”. He emphasized: “We really need to roll up our sleeves and get to work. So that by the time this becomes a much bigger problem, we actually have the regulatory framework to contain the risks.” Ah, so rules are the solution!
Crypto prices could drop to zero
He gave this warning on the BBC Today show this week. Cunliffe started by recognizing that cryptocurrencies are “growing very fast” and becoming mainstream. The latter is precarious, because then many people are ‘at risk’. He stressed that at this rate of growth, they could pose a threat to the established financial system. The Bank of England board further pointed out that financial professionals, such as fund managers, want to know whether cryptocurrencies should be part of their portfolios.
If the prices of cryptos then start to fall, it will cause a domino effect. And then institutions, such as the Bank of England, must be ready to contain those risks. He said that it is certainly possible that the prices of cryptos could fall practically to zero.
Solution
“The point of concern, I think, is when it becomes integrated into the financial system – when a major price correction could affect other markets and established financial market players,” Cunliffe said. This is not the first time such institutions have raised concerns. In October, Cunliffe said crypto could collapse and urged regulators to act quickly to set up a regulatory framework for them.
