European Central Bank Official: If Bitcoin Fails, Central Banks May Suffer
As Bitcoin heads for $10,000, a downward price spiral may affect the real economy and require action from central banks. Bitcoin is already trading above $10,000 in Korea and may trade over that level soon. But in case of a fallout, the asset, which has a market cap of above $160 billion, may affect the real economy, cause panic and shift the blame to central banks. At the moment, the reserves of Bitcoin, even if all of the outstanding coins can be exchanged for cash, are just a fraction of the world's gold reserves, which have a total cost of $7.5 billion. But Bitcoin is gaining prominence and lately, it is always in the public's eye. "The problem with bitcoin is that it could easily blow up and central banks could then be accused of not doing anything," said Ewald Nowotny . "So we’re trying to understand whether bank activity in relation to cryptocurrency trading needs to be better regulated." Nowotny, who is the Governor of the Austrian Ce...