The director of the Bank of England aims at the increases in interest rates decreed by state entities in various nations, which would leave less capital to invest in the crypto space. However, the official leaves out that inflation in the economies also invites investors to look at Bitcoin and other cryptocurrencies as an alternative.
The vice president of the Bank of England, Jon Cunliffe, highlights that the current financial conditions ongoing in the country and other nations will make investors abandon risky assets such as digital currencies and instead opt for safer options.
Investors will Opt for Safer Assets than Digital Currencies
Cunliffe exposed these ideas during a conference held by the Wall Street Journal (WSJ). The official reflected on increases in interest rates in the US, which would exert pressure against digital assets since there would be less capital entering that sector.
Cunliffe thinks that the country will see an outflow of risky assets as this process continues.
In addition, Cunliffe also expressed that Ukraine’s conflict due to Russia’s armed invasion could also push citizens to invest in currencies that they consider safer, especially since digital assets have not reacted the most favorable in recent weeks.
Although there are specific special allegations in the position of the representative of the Bank of England, the idea could not be counting on various factors present in the current panorama that could be playing a good game for the digital assets ecosystem in general.
Many critics and experts expressed that Cunliffe’s position leaves out the economic struggle faced by the economies of the United Kingdom, Europe, and the United States of America, which is more evident in the latter due to the increase in inflationary rates that harm the North American Nation.
This crash in the US dollar is what would be pushing many investors to put an eye on digital assets such as Bitcoin, whose deflationary features and limited management make it a perfect option in these times.
Michael Saylor, CEO of MicroStrategy, and the famous best-selling writer, Robert Kiyosaki, stand out as defenders of these theories. They reflect the present crash in many fiduciary currencies, suggesting users find shelter in digital assets, mainly Bitcoin, for the aforementioned features.
A More Robust and Proper Regulation
Although the need for digital assets got already felt among traditional investors, for many experts, there is still a significant barrier to reaching this space because there are still no strong regulations on crypto assets.
According to Francois Villeroy, Terra and the crash of its principal exponents is a sign of the need for regulation. This regulation could even be at a global level to set up more appropriate standards for all industry actors internationally.
By: Jenson Nuñez
