The deputy governor for markets and banking at the Bank of England, Dave Ramsden recently sat down with CNBC for an interview. In the talk, Ramsden said that digital assets like Bitcoin are much too volatile to be a store of value and they don’t meet the principles of currency.

In citing the research of the Financial Policy Committee, Ramsden stated that the high volatility and the relatively high costs of crypto transactions settlements don’t make cryptocurrencies as practical as it stands as a currency.

Volatility

Volatility for emerging asset classes is always going to be an issue for new investors.

As a new asset class, investors are expecting volatility in crypto assets and generally see it as a risky investment, which is completely understandable.

The CEO of Xapo and a director at PayPal, Wences Casares has been a big supporter of cryptocurrencies and Bitcoin for many a year now and he even wrote in an essay where he puts the chances of Bitcoin succeeding in the long-run at around half.

Casares stated:

“In my (subjective) opinion those chances of succeeding are at least 50%. If bitcoin does succeed, 1 bitcoin may be worth more than $1 million in seven-to-10 years. That is 250 times what it is worth today (at the time of writing the price of bitcoin is ~ $4,000).”

History

If we take a look in the history books, we can see that Bitcoin’s track record over the past ten years has led investors to become more confident in the asset.

The criticism of the intense volatility of Bitcoin and cryptocurrencies is understandable though. As it is an asset class that still in its very early days, volatility to extreme levels is expected.

Ramsden has said: