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The head of the Bank of England (BE) suggests that potential investors refrain from acquiring cryptocurrency assets as having no intrinsic value.
Andrew Bailey issued a warning about cryptocurrencies, calling buyers of crypto assets people comparable to collectors and custodians of rarities.
“People collect all sorts of things. Bitcoin was generally launched to circumvent the restrictions of central banks. Digital products are not a practical means of payment, although the technologies themselves, such as blockchain, are undoubtedly interesting and important.”
The Bank of England states that during the pandemic, interest in crypto assets has increased dramatically: the market volume has increased from about $ 780 billion (£ 624 billion) at the beginning of 2021 to about $ 1.23 trillion (£ 984 billion) in 2022.
However, the current fall of the cryptocurrency market and the coming crypto winter have led many investors in digital assets to collapse. The loss of billions has raised fears that the collapse of the cryptocurrency market could be the starting point for a noticeable fall in the stock market.
In April, the Bank of England’s financial security arm increased its budget for the upcoming financial year to take into account the possible consequences of the risks associated with digital assets.