Bank of England calls Bitcoin worthless while UK inflation hits 10-year high
The Bank of England said that Bitcoin could become “worthless” and that anyone who invests in cryptocurrency should be prepared to lose whatever they have invested.
On Tuesday, December 14th, a post was posted on the bank’s official website titled “How much is Bitcoin worth? “. The article states that Bitcoin does not meet many of the requirements for a currency and that it is inherently unstable.
“Only 21 million bitcoins will be created. And it could be worth something. Because of this scarcity, some people refer to Bitcoin as digital gold. But the very scarcity on which Bitcoin is based can also kill it. Its scarcity may even end up making Bitcoin worthless. Simple game theory tells us that the reverse induction process should actually get the smart money to quit at some point. And if that happens, investors really need to be prepared to lose everything, ”the article says.
Importantly, inflation in the United Kingdom hit a 10-year high in November as consumer prices continued to rise. The consumer price index increased over the year from 4.2% to 5.1%. This was the highest inflationary growth in 10 years and was more than double the central bank’s forecast.
Members of the Monetary Policy Committee will meet on Thursday, December 16 to discuss the need to tighten monetary policy in the face of rising inflation and retaining the labor market, but the rapid spread of Omicron Covid-19 has cast doubt on short-term economic prospects.