The cryptocurrency posted its largest one-day decline in nearly two months on Sunday. The withdrawal came after Bitcoin hit a record high of more than $ 64,000 (£ 45,773) last Wednesday following the debut of the largest U.S. token exchange, Coinbase Global Inc., which could suffer heavy losses from speculation in crypto assets – also from Microsoft co-founder Bill Gates.

And Chris Clothier, investment manager at CG Asset Management, believes things could get worse for investors.

In a special report on cryptocurrency in January, he stated, “History doesn’t seem to be on Bitcoin’s side.

“We are not aware of any private currency – other than those that are largely pegged to an existing fiat currency – which has been successful – where success is defined as holding its real value over an extended period of time.

“Fiat currencies exist and last precisely because they are instruments of state coercion.

“Private currencies do the opposite – they try to undermine the power of the state.

“At least they won’t get any government support. In the worst case, they can be overridden by law. “

And now it seems that Mr. Clothier’s prediction might come true.

Yesterday, Sunak announced that the Treasury Department and the Bank of England (BoE) would look into the feasibility of a “digital pound” for businesses and households to help innovate the UK financial sector after Brexit.

Charged plans for a BoE-backed digital version of the pound sterling would potentially allow businesses and consumers to have accounts directly with the bank and bypassing others in making payments over the next several years.

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Speaking at a financial industry conference, Mr Sunak said, “We are launching a new task force between the Treasury Department and the BoE to coordinate exploratory work on a potential central bank digital currency (CBDC).”

Shortly thereafter, he tweeted the single word “Britcoin” in response to the Treasury Department’s announcement of the task force.

Other central banks are also reportedly trying to set up digital versions of their currencies.

China is a front runner in adopting a CBDC, but last week the European Central Bank (ECB) announced it was exploring an electronic form of cash to complement banknotes and coins.

However, it was added that any launch was still a few years away.

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The ECB said: “A digital euro would be an electronic form of central bank money accessible to all citizens and businesses – like banknotes but in digital form – to make their daily payments quick, easy and secure.

“It would complement cash, not replace it. The Eurosystem will definitely continue to issue cash.”

Christine Lagarde, President of the ECB, added: “The euro belongs to the Europeans and our mission is to be their guardian.

“Europeans are increasingly turning to the digital when they are spending, saving and investing. Our job is to secure trust in money.

“This means making sure that the euro is fit for the digital age. We should be ready to spend a digital euro if necessary. “

The BoE seems ready to measure up to the EU to start the new revolution. A digital version of the pound sterling would not replace physical cash or existing bank accounts.

It added: “The government and the BoE have not yet made a decision on the introduction of a CBDC in the UK and will be engaging with stakeholders on a large scale on the benefits, risks and practicalities.”

The UK’s Financial Conduct Authority (FCA) previously warned against investing in crypto, as Mr Clothier warned.

It says, “When consumers invest, they should be ready to lose all of their money.

“Some investments that advertise high returns on crypto assets may not be subject to regulation beyond the fight against money laundering.

“Considerable price volatility, combined with valuation difficulties [Bitcoin] Reliably expose consumers to a high risk of loss. “

Express.co.uk does not provide financial advice. The journalists who worked on this article do not own Bitcoin.