Topic: Will crypto lead to the next financial crisis? - page 3. (Read 1239 times)

The financial institutions that run the world are not heavily invested in crypto enough where a bubble burst would set them back.

What's going on in China is a crash after the nonpayment on billions in liabilities, and what happened with the housing market crash in the US was a bubble artificially created by banks handing out loans like candy.

Crypto doesn't necessarily have these issues because of the limit of supply. That's not to say if at some point the world was so heavily involved in crypto that a bubble burst could potentially cause strain, but the likelihood of that is small.

 A cryptocurrency crash will lead to significant financial repercussions or even the next financial crisis. The future of cryptocurrency is bright as a lot of developments. cryptocurrencies are leading to systemic risk adoption and never ending supply.

I agree that this pandemic has made everyone aware of the importance of investing, so for those who have not invested in any assets. Now is the right
time to start investing in crypto, why am I saying that, because crypto's performance is the best compared to other assets in a pandemic situation
like now. Even many people become rich after investing in crypto, but need to learn first about how crypto works, that way we will better understand
how to make a profit from cryptocurrency.

Many people are starting to invest in crypto because of the faster growth in value than other investments. This pandemic made most people realize that investment is very important. This pandemic has made a lot of people out of work, people who invested in the past are very lucky because the investment really helped them in difficult circumstances like this.

The crisis occurred due to a lack of assets backing and also because of human greed.

These two factors can be controlled using blockchain, smart contracts and oracles. If the security of all issued loans, all issued shares and tokens, all the cash flows of companies and defi projects were available online on some analytics board, then it would be difficult to overestimate them and then drop the price. After all, everything is visible and understandable

I understand you
There are no only good things and only bad, they are all grey until you use it for the benefit of humanity.
Many people exploit crypto sphere in the aim to achieve fast financial success after holding several ICO and do nothing useful for market and society
It is very pitty that the most people still have no idea how to live this live. The answer is pretty simple: live in accordance with your brains and heart. All things and processes in the world will be nice and there will be no crimes, if only more then 51% of Earth population live their life in environmentally friendly way

So i just want to say that crypto and blockchain as a tools can avoid poorness in good and strong hands.
But in bad weak vicious  hands it will be scam after scam with no adoption for the world' benefit

The growth of crypto is something to celebrate But the impact of crypto on the world economy is negligible. Compared to other industries, crypto is still very young and small. At the moment, cryptocurrency is probably the place where some people can avoid the economic crisis caused by the covid pandemic.

We will never have a sound financial system, we can only thrive for a system that is less rotten than the last one. That is similar to what Musk said: Whether Bitcoin is the perfect solution that we are looking for to become a global currency. He answered no, Bitcoin is just less bad than fiat. I think I see some truth in that. Bitcoin will also be far from perfect because there is no perfection. Whenever it is about money, you will see powerful actors try to get control over it. This time it is just much more difficult as Bitcoin is way more resilient to power-drive attacks due to its decentralized nature and its incentive system.

The economic crisis cannot be caused by Bitcoin, but the inevitable result of the current debt inflation in the legal currency system. The scale of Bitcoin is small, and its market value is not large enough to have a significant impact on the global financial system and pose any threat to it.
The collapse of cryptocurrency may cause serious economic losses to many investors, but it will not have a great impact on the financial system and will not affect the turbulence of the world economy.

According to economic historian from the University of Cambridge, Garrick Hileman, said cryptocurrencies triggered the trigger for the financial crisis. Hileman said the growing number of financial institutions interested in cryptocurrencies created a rapid increase of "systematic importance" giving rise to "systematic risk".

Hileman said this at the end of 2017 to Business Insider, at that time the price of bitcoin was still around US $ 19,000/BTC.

At that time, Hileman said that if there was a crash in the financial market, bitcoin and cryptocurrencies would be more widely accepted. The prediction is accurate, global financial markets experienced turmoil in March 2020 when the corona virus was declared a global pandemic. Since then more and more financial institutions to large companies are investing in bitcoin, the price continues to skyrocket.

In 2017, the price of bitcoin skyrocketed 2000%, to close to US$ 20,000/BTC. At that time, economists in a survey said bitcoin did not have the risk of triggering a crisis, because of its small market capitalization and separate from other financial markets.

The current market capitalization of bitcoin and all cryptocurrencies has certainly multiplied, because the price has moved in the range of US$ 60,000/BTC. Based on Coin Market Cap data, bitcoin's market capitalization is currently US$1.1 trillion.

In comparison, Morgan Stanley Wealth Management, which provides bitcoin access services, has AUM (asset under management) assets of US$ 1.24 trillion as of June 30, 2020, based on data from ADV Rating.

This means that the current bitcoin market capitalization is still under AUM Morgan Stanley Wealth Management.

Meanwhile, the market capitalization of all cryptocurrencies is currently US$1.81 trillion. This market capitalization is also lower than USB Wealth Management's AUM of US$ 2.6 trillion as of June 30, 2020.

The market capitalization of all cryptocurrencies is also much lower than gold which is around US$ 11 trillion.

Even if it is considered that bitcoin's market capitalization is still not large enough to trigger a crisis, Hileman said the integration of traditional financial markets is starting to happen and very quickly. Thus, cryptocurrencies will not only threaten, but could "exacerbate" the crisis if it happens again.

I also feel that until now the usd dollar has felt very high in exchange value since the economic crisis in 1997. But also what makes it difficult for us is the economic system related to politics, and of course there are various interests that are not all devoted to the people. indeed it is different if crypto does not require a central bank which can actually cut operational costs, but again, the government is in charge of a regulation

Compared to the marketcap of banks all around the globe what the cryptocurrency market holds is very small. Maybe the growth in a more sustained manner for long years might make some impact when there happens a crisis. In most cases the wrong policies, lack of transparency, and corruption is the sole reason for any form of financial crisis. When there is possible chances of correction through blockchain technology and adoption of bitcoin financial crisis won't be that effective.

The financial crisis does not always bring positive changes, for example in my country.  The crisis in 1997 has saddened us to this day, the exchange rate of the Rupiah which was stable against the Dollar is now very low when compared to the Dollar.  The hereditary state debt has become the biggest burden to date.  However, currently crypto does not provide the alleged crisis potential because crypto does not use a qe policy.  Everything is left to the market and if banks adopt crypto then people will realize that there is no need for a central bank anymore.  Because the whole economic system is rotten today is the central bank everywhere.  They are regulators as well as creators of chaos in the economy.

That is a one-sided point of view in my opinion. Yes the cryptocurrency space shows that people desire for something that is different from what they are used to, which is first and foremost something that does not support quantitative easing and also raises capital mobility on the individual level, but we shouldn't forget that we are also all better off if we do indeed have some tools in place to get fraud under control as much as possible without sacrificing freedom at the individual level. I know that is a dilemma and it can never really be fully controlled for, but it is in our best interest to find the sweet spot. Crypto has its own set of problems that needs to be addressed.

I agree with your words that crisis is a time of changes.
In my opinion bitcoin and the whole crypto thing shows how it can be - open market for everyone anonymously with no credit ranks. Crypto market is a surgery tool, that shows us how a rotten system we have. And yes, it can lead to mass disappointment in the old markets and therefore results to financial crisis on these markets.

Government and central banks denyed crypto at first,
then they started to launch own crypto products
Because they know, if changes dont come from reforms, they come from revolution. So central authorities are afraid of this foreseeable financial revolution

many people have the wrong perception in this matter, not legalizing does not mean it is a negative response. I'm not too worried about this kind of news because I don't think it will have a big effect on the bitcoin price. Honestly I'm more worried about FUDs made by people like Elon 

I always watched financial crises as a time of change! Yes, many big ones fall down, some new arise... while ordinary people suffer in that game of power! Usually the ones at the end of the food chain!
I believe that crypto is a new player in that game! The true power of crypto are people behind, there is a strong/rich group of people who stand behind the fiat/monetary systems around the world! We saw many little battles between crypto and government/bank sectors from different countries and looks like crypto is winning, simply because more people are joining, disappointed in traditional institutions!
It will be interesting to see what will happen, I expect some bigger battles in the future! More organized and widespread, probably after some big disaster, like it always happen!

A crisis only happens when people selling something for fiat money, and there is not enough fiat money. If crypto is owned by majority and they want to cash out, there will be a crash. However if they could just spend crypto to buy things, they don't need to cash out, so the fiat money liquidity crisis might be much less. In worst case, we have USDT and USDC that can be printed out of thin air to support the price

Yes right, the government's negative response is the main cause of the crypto crisis, users will panic and sell at any price so that it makes crypto worthless, of course this makes a great financial crisis because the crypto market is currently very large.

Government is like support to cryptocurrency because whenever they kicked against cryptocurrencies is the more cryptocurrency get elevated or firm, the crisis's government can is base on what they regulate, so coming to cryptocurrency network nothing they can do that will lead to crypto crisis more especially bitcoin in question, for now adoption of bitcoin is getting influential every minute of the day.