According to a Bank of England official, the current cryptocurrency winter will not contribute to increased adoption of cryptocurrencies such as bitcoin (quotation BTC). According to him, there could be a "backlash" against this ecosystem, as has already happened in the past with other technologies that have failed and disappeared.
The banker is Jon Cunliffe, current deputy governor for financial stability of the British institute, who predicted the end of bitcoin adoption during a speech given at an event in Singapore a few days ago.
"There are examples throughout history of technologies that have been sidelined or rejected due to dramatic initial failures," he said. “In the end, subsequent crypto victories will not help the spread and adoption of these technologies, nor the benefits they can offer,” she coined.
What is cryptocurrency winter?
Cryptowinter, also known as the bear market, refers to the current state of the market, where major cryptocurrencies such as bitcoin or ether (ETH) are trading in the red, shattering estimates and alerting investors. This situation was also brought about by the disappearance of cryptocurrency projects such as Luna and TerraUSD.
The representative of the fiat system points out that this backlash to the Bitcoin ecosystem, hit by the bear season, can be addressed by understanding that innovation "needs regulation".
"Innovation and regulation are ultimately friends and not enemies," said Cunliffe, adding that "it is only within this framework that (cryptocurrencies) can truly thrive and deliver the benefits of technological change."
It is impossible to say how effective and disruptive these technologies will prove in the financial sphere. History offers us many examples of technologies that promised a lot but did not deliver. Given the pace of change and disruption we have seen in other sectors of the economy, it would be very unwise for financial regulators to ignore these developments - Jon Cunliffe, Bank of England Deputy Governor for Financial Stability.
But adoption is still growing
Despite bankers' warnings, the so-called cryptowinter appears to be an unaltered specter in terms of adoption, with data confirming that cryptocurrencies and their technologies continue to be adopted by new and old users.
One example is Bitcoin's Lightning Network, whose adoption has grown significantly since last year. In fact, the number of transactions, which gives an idea of the size of the adoption, has increased by 400% within a year.
With the number of channels on the Lightning network, the number of alternatives to make payments in BTC using this technology is growing. There are about 83.233 active channels right now, 780 more than yesterday, according to the Amboss.Space explorer.
Furthermore, according to the same banker Conliffe, the technologies born from cryptocurrencies will continue to develop over time, both in their world and in the traditional financial system, where they will have an even greater presence. In other words, the new economy and its adoption will prevail, even in the midst of the purge that the crypto-winter brings, as analyst Juan Ramón Rallo said.