Bitcoin prices reached a new record high after the Bank of England set a date for its launch of its own cryptocurrency.
The coin broke through $68,000 (£50,150) for the first time, meaning it is now up over 110 per cent since the start of the year. Its previous record was in late October, when it hit $67,700 (£49,920).
Sentiment was helped by Apple boss Tim Cook who said he owned some crypto- currency, adding that he had been interested in the asset class ‘for a while’.
Cryptoboom: Bitcoin broke through $68,000 (£50,150) for the first time, meaning it is now up over 110 per cent since the start of the year
Bank of America says it’s the highest performing asset in 2018. Analysts speculate bitcoin is being used as an inflation hedge by investors.
JP Morgan said in a note: ‘We believe the perception of bitcoin as a better-in-inflation hedge than gold is the main reason for the current upswing.’
Last week, the Bank of England stated that inflation will peak at 5.5% in early 2019. Meanwhile, the US is experiencing a hot economy.
In an update, yesterday the Bank stated that they would open a consultation to discuss the possibility of creating a central bank digital currency (CBDC).
Dubbed ‘Britcoin’, the Bank and the Treasury cooled expectations by saying it would take until at least 2025 for the currency to be launched in the UK.
Bank of America reports that Bitcoin was the highest performing asset for 2017 and analysts speculate that some investors may be increasingly using bitcoin to hedge against inflation.
‘The earliest date for launch of a UK CBDC would be in the second half of the decade,’ they said. It is a ‘major national infrastructure project’, officials said, designed to exist alongside cash and bank deposits, rather than replacing them.
The Bank’s deputy governor for financial stability, Jon Cunliffe said: ‘The plan to publish a consultation next year on CBDC is a crucial step in our policy development, especially as we further our thinking on the pressing issues at hand.
‘What it will do is provide a platform for interested parties and relevant groups to engage with the key questions on the merits of CBDC, and whether the public sector should advance to a development phase.’
John Glen MP, the Economic Secretary to the Treasury, said yesterday: ‘This consultation will begin an open discussion on the role a UK central bank digital currency might play in the UK.
‘I’d encourage everyone to contribute to the discussion so we can explore the opportunities this could bring, as well as understanding any risks it may pose.’