Vice President of the European Central Bank (ECB) said investors take a "risk" by buying bitcoin at its high price.
S addressing CNBC Wednesday, Vitor Constancio, said:
This is a very special asset, it's a speculative asset that, by definition, looks at the evolution of its price. Investors take this risk of buying at such high prices.
Constancio's comments come at a time when digital currency is experiencing a surge in value. Earlier today, it was reported that bitcoin had risen to more than $ 11,000 with rising prices for various currencies. To date, cryptocurrency has grown by more than 1,000%, a colossal business considering that it was trading at $ 1,000 early in the year and that it has weathered many obstacles.
Some, however, are still waiting for big things from bitcoin. Mike Novogratz, a billionaire investor and hedge fund manager, estimates that he could easily reach $ 40,000 by the end of 2018. However, at a recent conference in New York he stated that it would not be easy to get there, adding:
There will be wild crashes because you will reach levels so far ahead of technology.
Central banks, however, have always been reluctant to adopt the market. The Vice President of the ECB said earlier this month that digital currencies will never replace the fiat system, adding that it was a "misnomer" simply used as an asset speculative.
At the time, he stated:
Private "cryptocurrencies" can never prevail as general substitutes for money.
Mario Draghi, the president of the ECB, also spoke about the digital currency market, claiming that they are not mature enough for the central bank to consider regulating them. More recently, Draghi said that they represented only a minimal threat to the financial system dependent on the central bank, despite the rise of the cryptocurrency market.
Not only that, but Constancio believes that central banks do not need to take the digital currency market seriously. During the interview, he said:
… in that we do not have any liability or even instruments that point to particular asset specific asset prices, this is certainly not the role of central banks.
Yet, regardless of whether the crypto-market, especially bitcoin, has been criticized by different CFOs, it seems that he has a firm foot in the door and will not leave anytime soon. Not only that, but we could soon read the headlines that the combined crypto market has become more valuable than JPMorgans.
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