Bank of England and Fed officials say Bitcoin is too small to threaten world economy
This Wednesday, Bitcoin prices topped $11,000, as central bankers worldwide seek to ease fears that a potential bubble in the cryptocurrency is a threat to the world economy.
Bitcoin has risen tenfold in value so far this year, causing skeptics to classify it as a classic speculative bubble that could burst, such as the US sub-prime housing crash that triggered the global market crash in 2008.
“Bitcoin just flew past the $11,000 mark, leaping $200 in barely 5 minutes,” said Neil Wilson, senior market analyst at ETX Capital. “It’s up more than 14% today alone and the year-to-date chart is simply staggering.”
As a result Central banks are now advocating regulations to impose control over cryptocurrencies in order to stabilize the market.
William Dudley, President and CEO of the Federal Reserve Bank of New York, said at a conference meeting on Wednesday that the FED is exploring the idea of it’s own Digital Currency.
Dudley is not the first FED official to comment on the growing popularity behind Bitcoin.
Philadelphia FED President Patrick Harker, said he doubted Bitcoin could ever undermine the US dollar, because it lacks the backing of a government.
“(money) only has value because we believe it has value, because we believe the government stands behind it. It’s all trust issues,” Harker said, according to a Coindesk report.
Bitcoin owners now have a growing concern as well, Bitcoin’s price since hitting $11,000 has collapsed to $9,200 and now Bitcoin owners find themselves in a position in which no one is willing to buy or trade.
Users of the digital exchanges saw slowed performances on their websites and in some exchanges could not log on to their accounts.
Dave Farmer, the director of business at Coinbase said that the company received an “all time traffic high” early Wednesday causing users to experiences some “slowness” while others simply could not log onto their accounts.
“Should be fully restored in the next couple of hours,” Farmer said in prepared remarks.