RATE Group | Senior BoE economist on Bitcoin’s ‘digital gold’ effect
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Senior BoE economist on Bitcoin’s ‘digital gold’ effect

16 Feb Senior BoE economist on Bitcoin’s ‘digital gold’ effect

Posted at 09:48h in Bitcoin News by

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In brief

  • Bank of England senior economist has published a working paper on Bitcoin’s price.
  • He argues that investors treat Bitcoin like gold when it’s price goes up.
  • He claims that Bitcoin’s price is stuck in a catch-22 situation.

Peter Zimmerman, senior economist at the Bank of England (BoE), has published a staff working paper on the price of Bitcoin and other cryptocurrencies.

The paper, which doesn’t reflect the views of the BoE, argues that the limitations of blockchain technology create a conflict between those trying to use the coin, and those speculating on its price. The result is increased price volatility, and people hoarding it like gold.

Bitcoin’s “digital gold” effect

Zimmerman claimed in the paper that Bitcoin’s mechanics cause people to treat it like gold.

Bank of England economist says investors treat Bitcoin like gold. Image: Shutterstock.

“When cryptocurrency is more valuable, households become reluctant to spend it on fees,” he said, adding,…

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