Topic: Will crypto lead to the next financial crisis? (Read 1239 times)

The reason in 2008 that housing caused a crisis in banking was it was used for tier 1 capital, core to the basis of all the banks lending was the value of this highly rated AAA debt.  Crypto in no way compares to level of assured value, its speculative much like any commodity trading the pricing is volatile and subject to change at any given moment; as such losses are much in the vein of caveat emptor.

Cryptocurrency cannot yet even theoretically lead to a global economic crisis. States are watching this rather closely. Therefore, at the recent summit of the G20 countries, they considered the impact of cryptocurrency and came to the conclusion that it does not yet pose a threat to the stability of the global financial system. If they further acknowledge such an impact, then the measures against the cryptocurrency will be quite tough.

It seems to me that today the world has not yet emerged from the economic crisis that began due to the coronavirus.  in many countries, the authorities are very actively beginning to transfer the population to non-cash payments in order to increasingly begin to control people.  Perhaps cryptocurrency projects, such as Junca Cash, which are designed to make a person's dreams of anonymous and decentralized money transfers a reality, will make us happier.

All cryptos worth $2+ trillion, so it is not really small. Nevertheless, crypto will not lead to a financial crisis. There are several reasons for this. Institutional investors and banks are only investing in cryptos with a very small portion, if any.  Moreover, compared to other assets, relatively few cryptos are bought with loans.
If I see a financial crisis, it will be caused by other asset classes, for example real estate, which is massively overvalued almost everywhere in the world. A good example is China, but also Australia, the US and many developed countries in Europe.

To make a financial crisis market cap should be larger. Mortgage-backed securities in 2008 market size were almost 4 trillion. At that time this was quite a big figure for the world economy. The Crypto market is still new and someone could crash the market with only several thousand BTC.

Right now this may not be the reason for a financial crisis but in the near future, it could be. The more we are heading towards web 3.0 the more crypto adoption will begin. This could attract big institutions which could manipulate the markets more frequently.

if you compare it with the world economy the crypto market capitalization is indeed much smaller, but if you compare it with the economy of a country the crypto market capitalization can be said to be very large and even exceed it. even the market capitalization of bitcoin alone can pay off the foreign debt of several countries, meaning that crypto has the potential to boost the economy of a country and even the world economy.

The cryptocurrency market capitalization is very small compared to the rest of the economy so it will not be able to affect the overall economy. Throughout the world's economic history, recessions have come from holes. Cryptocurrencies look very bright, transparent so I think crypto is the solution to the economy instead of seeing it as a risk.

when compared to the world economy bitcoin is a small investment, but bitcoin will continue to grow as more and more new investors invest in bitcoin. We all know that the price of bitcoin continues to grow and the market cap continues to increase, that way bitcoin could be something big in the future.

It will not cause a financial crisis. After all, the size of Bitcoin is very small, and it is a small investment product, which will not affect the economy and finance, because Bitcoin is insignificant for the economy and finance. At present, there are also some companies investing in Bitcoin. When Bitcoin plummets, there will be some losses for the company, but it will not have any major impact on the economy

The tech bubble had a lot of institutional money in it, Bitcoin not so much, in fact it is only starting. So, claiming that cryptos will lead to the next financial crisis could take place but not until at least 5-6 years later from when institutional money has started to flow in. Therefore, as more and more of these self proclaimed BTC crash experts proliferate it is safe to assume that a bottom is forming.

it is still difficult if crypto can be the cause for the crisis. I think this is still uncertain because the power of crypto in the world is very small, the crypto market is still easily shaken by small issues compared to money in all countries or companies that are very different. so the narrative I think is irrelevant

yes the financial crisis existed long before bitcoin existed. I actually think the opposite, I think bitcoin will reduce the impact of the financial crisis because bitcoin is able to improve a person's economy. the problem now is that not everyone agrees with this, many people think bitcoin is a high-risk investment and can cause losses in a very fast time.

Very unlikely. While I do not believe bitcoin is tulip-mania but there is a precedent for the sudden drop on what at the moment was an speculative, but quite minoritarian asset and that is effectively the tulips in the 17th century, in Holland. It did not provoke a crisis at all. Fortunes changed hands, a few got rich, a few lost their fortunes and other than that...life went as usual.

Now, this is a completely different thing when a crisis strikes to a widely distributed assets such as mortgages or large banks. These are "too big to fall" and do influence the economy. Bitcoin is not even near that.

I consider the crisis of the contemporary economy to be the collapse and degeneration of the entire government system and the collapse of government intermediaries, central banks, treasury... It's not simple.  is merely one possible causative factor.  Inflation risks are seriously increasing amid the heavy impact of covid19, which shows that the current currency cannot meet current requirements and that entails a delayed response to issues urgent in the future.  If bitcoin and cryptocurrencies are supposed to be the reason for that then it is completely untrue.

These are both FED based problems from easy money.  The MBS was never traced back to government actions but when you subsidize an industry you allow such bubbles to occur.  The solution from 2008 and 2009 going forward was to entirely take over the industry altogether, the majority of private US housing debt is now owned by government supporting false interest rates in line with FED policy, QE and so on.
   None of this is capitalism, its politics and central government distorting markets for political reasons.   The 'greater good' argument causes alot of harm in side effects.    Nobody has admitted as much, the waters are kept muddy because reform would be costly to whichever party forwarded such actions as required.
   'The can kicked down the road' is a phrase for the eternal problem which eventually does result in a crash or "financial crisis" as OP mentions.  Not because I want it, my commentary would be seen as radical and rejected as such but the basic elements of economics reflect natural dynamics that eventually will deny even the iron grasp of government control.   Same reason why communism is a failure and so on, not because of my or anyone elses personal preference but it just doesnt naturally work and eventually results in failure, collapse and death in the population from starvation in the extreme.  Communism is willing to take that risk, suffer that loss for its continuation of the elite but I do hope we are better then that and able to correct and reform mistakes before the worst occurs

Crypto is not the cause of a problem to finance private, corporate or national interests, its a self adjusting system with no force on the economy except through the free choice of users.  There is no subsidy to its operations, no taxes or laws that deny freedom to use alternatives nothing that resembles a negative not already reflected in its free market price.  Everything has faults, the worst systems are rigid and wont allow any reflection of failure till its too late to adjust course from a crash; this is not the nature of BTC imo

The financial crisis is caused by inflation caused by banks' random printing of money, and the small market value of Bitcoin will not be issued at will, and it will not have an impact on the financial crisis.

By the way, we don’t know if that the price of bitcoin is high or low means whether it will increase of course you deserve to join an investment like bitcoin right!  however, you really need to earn so that you can save a lot and you really need to make sure that you can invest little by little just in case or maybe you can hold back first regurgitate what you can invest and try to wait or persevere before  join so you don't regret it later, you know what i mean.  , investing is like a gamble that you do not know when you will win or lose so just be careful before joining an investment because we do not know if you need the right destination and must trust immediately make sure you really know how to invest right.

From the time immemorial there have always been Financial crisis even before bitcoin was developed. The Financial analyst predicting the financial crisis should not mention bitcoin at all. Bitcoin will not the cause of the economic meltdown.

I definitely agree with this. They are holding 70+ billion dollars in their hands, sure they are investing it here and there and even making some profit with it I am sure but we are trusting 70+ billion dollars to a company and that's it. The moment that company collapses for any reason would mean that all of that money will be gone and all of USDT will worth zero and that crash could hurt crypto world unlike anything else.

It could be as big as anything we have seen. However, I do not agree that it may create a big financial crisis, in 2020 and 2021 just USA printed out 4+ trillion dollars, and yes it has a huge inflation compared to older days but they are still living, 70 billion gone would upset us, but it would not matter to most big nations at all. We just need to take care of ourselves and that's it. If we can survive that as crypto world, then we can survive anything.

If we think practically still require crypto instruction to the larger part of the populace of the world.People still dont know crypto can boom the economy.It isn't indeed legitimate in numerous nations and its esteem isn't indeed steady due to tall instability so the world would certainly attempt and be subordinate on it. There perhaps a emergency within the crypto world at the minute but that does not cruel genuine world will moreover encounter the same thing.Crisis are each where we all know how fiat cash confront the emergency numerous times so usagee of crypto will not create emergency but forbidding and not legalizing the crypto it'll .