Bitcoin does not pose a risk to financial stability, despite growing scrutiny amid manic buying around the world, according to a poll of respected economists.
Some 34 of 48 economists surveyed by the Centre for Macroeconomics (CFM) and the Centre for Economic Policy Research (CEPR), or 71 per cent, said the cryptocurrency does not have the potential to topple the financial system.
The astonishing surge in the value of bitcoin over the past year has attracted attention of regulators around the globe, as well as making an increasing splash in mainstream financial discourse as believers and sceptics argue over whether the current surge represents a bubble.
Excitement around the currency has increased as mainstream trading houses have offered futures for the currency, allowing short selling by professional investors.
A majority of the economists surveyed, 61 per cent of respondents, said regulation of the cryptocurrency should increase.
The notional market capitalisation of bitcoin – the value of all the crytocurrency in circulation if all were sold at current prices – is over $300bn, according to the Coinmarketcap website, up from only around $15bn at the start of the year.
While the value of a bitcoin has risen by around 1,770 per cent over the course of 2017, according to the Coindesk bitcoin price index, the total size of all assets in circulation is tiny compared to the global financial system.
Michael McMahon, a macroeconomist at the University of Oxford, said cryptocurrencies are "still too small and lacking in widespread ownership, especially among large investment groups, to be a serious risk to the overall financial system".
Other economists pointed out bitcoin is currently being treated as a speculative commodity, rather than a currency and that professional investors are therefore unlikely to expose their portfolios to bitcoin.
Ricardo Reis, economics professor at the London School of Economics, said: "Like gold, [bitcoin] fluctuates wildly in value and it is subject to fads and manias. As long as regulators treat it as a highly speculative investment, like so many other investments out there, then it should pose as much risk to the financial system as so many of these do."
However, those economists who thought bitcoin does pose a threat to the financial system cited the high uncertainty surrounding the future place of cryptocurrencies.
Etienne Wasmer, a professor at the Sciences Po, in Paris, said: "This is radical uncertainty, nothing close in history as far as I can tell."