The past week has been huge for Bitcoin and other crypto prices. As a result, the combined crypto market hit its ATH of almost $2.5 trillion.
Bitcoin alone has jumped 50% since its September lows. Currently trading at $62,418 (at the time of writing) for the first time since May. The Wall Street giants have started offering bitcoin and crypto services, including the recently approved bitcoin futures ETF. All of this is pushing bitcoin higher and higher. However, there is a warning of major crypto price collapse!
Earlier this week, Jon Cunliffe, an influential central banker, gave the following remarks:
“As the [2008 global] financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems—sub-prime was valued at around $1.2 trillion in 2008.”
He also pointed out the growth of the crypto market:
“roughly 200% in 2021, from just under $800 billion to $2.3 trillion today.”
Cunliffe is currently working as the deputy governor for financial stability at the Bank of England. He warned in his speech that “a massive collapse in crypto-asset prices [is a] plausible scenario.” Moreover, he added that the fast-growing BTC and crypto could threaten the financial system if not regulated urgently.
BTC is Highly Volatile
Although the price of BTC is rising continuously in the past years, it has remained greatly volatile. Just recently, in May, when bitcoin rose to its ATH price of almost $65K, the market had a downfall, with the BTC losing half its value in just a few days.
“When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice,” Cunliffe mentioned, adding: “Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency.”
