Sir John Cunliffe, deputy governor of financial stability at the Bank of England, says that cryptocurrency investors are facing tough times as the U.S. Federal Reserve and other central banks tighten monetary policy. He warns.
Bank of England official warns about cryptocurrencies
Sir John Cunliffe, deputy governor of financial stability at the Bank of England (BoE), warned crypto investors at a Wall Street Journal conference Tuesday, Reuters reported.
A Bank of England official warned that crypto investors should expect tougher times ahead. He explained that as the Federal Reserve and central banks around the world tighten financial conditions, investors will gravitate toward safer assets.
In response to a question about whether rising interest rates would increase pressure on cryptocurrencies, Cunliffe was quoted as saying.
Yes, I see this process continuing and the beginning of (quantitative tightening) in the United States… I think we will see a shift away from risky assets …
Federal Reserve Chairman Jay Powell said last week that he would continue to tighten monetary policy until he sees “clear and convincing” evidence that inflation is down to the 2% target.
Mr. Cunliffe also mentioned another factor affecting the cryptocurrency markets. Noting that the war between Russia and Ukraine is encouraging investors to move their money into safe assets, he advised:
If there is a shift away from risky assets, the most speculative assets are expected to suffer the most.
Last November, Cunliffe said the threat of cryptocurrencies to the stability of the U.K. financial system was “coming,” and called on regulators to take action.
In December he said that the value of cryptocurrencies could plummet, stating, “. Its price could fluctuate significantly and theoretically and practically could be zero.”
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