The bitcoin price has dropped to under $20,000 per bitcoin, a psychological level bitcoin first breached in 2017 before collapsing by around 90%. Ethereum, its biggest rivals BNB BNB , solana and cardano, as well as payments focused coins XRP XRP and dogecoin have all crashed along with the bitcoin price—wiping $2 trillion from the combined market.
“The analogy for me is the dot-com boom, when $5 trillion was wiped off values,” Bank of England deputy governor Jon Cunliffe said at the Point Zero Forum in Zurich this week, it was first reported by Bloomberg. “A lot of companies went, but the technology didn’t go away. It came back 10 years later, and those that survived—the Amazons and the eBays—turned out to be the dominant players.”
Bitcoin’s BTC creation over a decade ago, the world’s first blockchain-based scarce digital asset that some people liken to a digital version of gold, opened the flood gates for a tidal wave of new cryptocurrencies, including ethereum and similar smart contract networks like BNB, solana and cardano, as well as cryptocurrencies focused on payments—such as XRP and dogecoin.
Ethereum, BNB, solana and cardano are battling for dominance of the decentralized app and decentralized finance market, sometimes called web3. Ripple, currently locked in a long-running legal battle with the U.S. Securities and Exchange Commission (SEC), developed XRP in an attempt to replace the aging international finance settlement system.
The meme-based dogecoin, based on bitcoin and originally created as a “joke,” has been adopted by the likes of Tesla TSLA billionaire Elon Musk and tech investor Mark Cuban as a means of payment.
The value of almost all major cryptocurrencies has rocketed since late 2020, boosted by wild speculation and the huge influx of pandemic-era stimulus measures. However, the Federal Reserve beginning to raise interest rates and reduce its swollen balance sheet sent the price of bitcoin and other cryptocurrencies into free fall.
“Whatever happens over the next few months to crypto-assets, I expect crypto technology and finance to continue,” Cunliffe said, adding cryptocurrencies have the “the possibility of huge efficiencies and changes in market structure.”
In contrast to Cunliffe’s relatively bullish attitude, Bank of England governor Andrew Bailey has repeatedly said he thinks bitcoin and cryptocurrencies broadly have “no intrinsic value.”