Bitcoin has been labeled “worthless” by the Bank of England. According to the Bank, anyone that invests in cryptocurrency should get ready to lose all they invested.
In a blog post, a staff member of the bank wrote, “what is a Bitcoin worth?” The staff member maintained that Bitcoin doesn’t meet the requirements needed for a currency, and as such, it is intrinsically volatile.
Thomas Belsham, the staff member, wrote:
“Only 21 million Bitcoin will ever be created. And that might be worth something. That scarcity is why some people refer to Bitcoin as ‘digital gold’. But the very scarcity on which Bitcoin is based might also be its undoing. Its scarcity may even, ultimately, render Bitcoin worthless.”
Investors Should Get Ready to Lose Everything
Generally, coins are included in Bitcoin’s supply when “miners” verify modifications to its blockchain record, which is about 19 million presently.
Even though the final amount of Bitcoins circulating may not be achieved until February 2140, Belsham maintained that Bitcoin wouldn’t be able to keep the system over time.
For this reason, he added:
“Simple game theory tells us that a process of backward induction should, really, at some point, induce the smart money to get out. And were that to happen, investors really should be prepared to lose everything. Eventually.”
United Kingdom Inflation Hit a 10-year High
Inflation in the U.K hit a 10-year high in November. The Consumer Price Index (CPI) rose by 5.1% in the year to November, rising from 4.2% in October.
According to economic forecasters, inflation was predicted to hit 4.7% in November. Meanwhile, the Bank of England predicted that inflation would initially hit 5% in spring 2022 before it eases to its 2% goal by the end of 2023.
On Thursday, December 16, members of the Monetary Policy Committee will hold a meeting to discuss tightening the monetary policy. However, the increase in Omicron Covid-19 cases has placed doubt on the short-term possibility for economic growth.
The U.K and U.S records of inflation levels have made investors consider Bitcoin and other cryptocurrencies to get protection against inflation.
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Wilson is a successful crypto analyst and content writer with many years of writing experience in finance and blockchain fields. His interests are in crypto-asset research and technical analysis, Fintech, Blockchain, DeFi, NFTs, and Personal Finance.