The vice president of the European Central Bank (ECB) has warned about the risks of investing in bitcoin at current valuations.
Speaking to CNBC, Vitor Constancio said developments in bitcoin’s price make it “a speculative asset by definition,” continuing:
“Investors are taking that risk of buying at such high prices.”
Bitcoin, the largest cryptocurrency by market capitalization, has seen astonishing rises in value in recent weeks that have seen it hit headlines worldwide.
In the last week alone, prices have shot past $8,000 to successive new highs that saw bitcoin peak at over $11,000.
While the value has since dropped closer to $10,000, the meteoric rally has prompted many in the finance space to say bitcoin is in a bubble.
Even so, Constancio told CNBC that the ECB is not in a position to regulate the cryptocurrency, saying, “We don’t have responsibility or even instruments that point to particular prices of particular assets, that is certainly not the role of central banks.”
His comments echo those of ECB president Mario Draghi, who in September indicated that the central bank does not have the authority to regulate cryptocurrencies.