The deputy governor of the Bank of England compared the current crisis with the dotcom crash. According to him, the survivors of this crisis could face the same situation as entities like Amazon and eBay.
The economist Peter Schiff suggested users not purchase crypto during the crash, while SkyBridge Capital CEO Anthony Scaramucci requested users to hold on despite the downturn.
On the other hand, when the newspaper of the Chinese Communist Party confirmed that Bitcoin would reach zero, the investor Michael Saylor defended the opposite idea and said that Bitcoin would never get to that level.
After seeing this problematic scenario, the Bank of England, the central bank of the United Kingdom, established some comparisons between the current collapse of crypto and the bursting of the dotcom bubble.
In May this year, Cunliffe said that investors might leave digital currencies in search of safer assets; anticipating a more profound stage for the crypto crisis.
Own CBDC
The Bank of England is also leading strategies for its retail central bank digital assets and will deliver a consultation paper by the end of the year. A key question is whether to produce a fully standalone CBDC with a fiat on-ramp or off-ramp or simply something flexible enough to help the private stablecoins.
Cunliffe explained how stable coins integrated into the supply chain might maximize efficiency. He said they couldn’t provide something that did all of those things.
Cunliffe then raised a question: Is it better to have private stablecoins to achieve more improvement in certain areas linked to a central bank ledger in some way?
Cunliffe added a response highlighting much confidence in that situation. He firmly said he wants to know where the responsibility lies and if the algorithm might go wrong.
According to the representative, when $5 trillion worth of securities got wiped, many entities abandoned their spot, but the technology did not. It came back ten years later, and the ones that survived, Amazon and eBay, turned out to become the alfas in the food chain.
A Slight Recovery
Digital Assets and volatility usually go hand-in-hand. The market is slowly experiencing a recovery, with Bitcoin returning to the $20,000 peak. The crypto market cap recently increased by more than 2 percent to $902 billion, according to information provided by CoinMarketCap data.
The most prominent crypto worldwide, Bitcoin, had reached an all-time 18-month low, whereas Ethereum observed a more than 55 percent drop; however, this is not the first time that cryptos have experienced such a fall.
By: Jenson Nuñez
