Bitcoin and cryptocurrency prices have charged higher this week, propelling the combined crypto market to its all-time high of around $2.5 trillion.

The bitcoin price has added 50% since its September lows, climbing to over $60,000 per bitcoin for the first time since May as Wall Street giants increasingly begin offering bitcoin and crypto services to clients—including a highly-anticipated bitcoin futures exchange-traded fund (ETF).

Earlier this week, influential central banker Jon Cunliffe, currently serving as the Bank of England's deputy governor for financial stability, warned "a massive collapse in crypto-asset prices [is a] plausible scenario" and the fast-growing bitcoin and crypto market could pose a threat to the financial system if not urgently regulated.

"You don’t have to account for a large proportion of the financial sector to trigger financial stability problems," Jon Cunliffe said in a speech, pointing to the cypto market growing by "roughly 200% in 2021, from just under $800 billion to $2.3 trillion today."

"As the [2008 global] financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems—sub-prime was valued at around $1.2 trillion in 2008."

While the bitcoin price has risen considerably over recent years it remains highly volatile. In May, after the bitcoin price rose to almost $65,000 per bitcoin, the market went into freefall with the bitcoin price losing almost half its value in a matter of days.

Cunliffe named major banks' expansion into crypto services, the growth of crypto hedge funds, and payment companies looking into allowing people to settle transactions in stablecoins—cryptocurrencies pegged to traditional currency—as indicative of the growing risk.

Cunliffe, who has played a central role in monitoring cryptocurrencies over recent years as an adviser to the G20’s financial stability board and the Geneva-based Bank of International Settlements, called on regulators to urgently rein in the red-hot market in with tough regulations.

"When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice," Cunliffe said, adding: "Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency."