Topic: Will crypto lead to the next financial crisis? - page 4. (Read 1265 times)
I would always vote that Goverment response to natural disaster or Government regulations will lead to the next financial crisis over crypto. I think there are enough people with "diamond hands" that can prevent an overnight crash capable of causing a financial crisis.
Why would it lead to? It's making everyone some money but at the same time it also makes people stay inside instead of coming back to the mainstream fiat based economy so I don't see how it's going to be that way for cryptocurrencies to cause a crisis, on the other hand, I think that we should look out for constant money injection in the economy through stimulus checks because they will cause hyperinflation.
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
I don't think that there is a lot risk coming from crypto currencies to be the root of evil of the next financial crisis. We have been in a zero interest rate world for more than 10 years already. This interest rate makes loans so cheap which is making huge messes in the financial world. Everybody can get a loan for almost free right now which made real estate very expensive. Buying an apartment or house right now will put us in debt for the next 30 years. I think we will see another crash in the real estate bubble.
As of now there isn't even a slight chance for cryptocurrencies to become the root of evil for the next financial crisis. Maybe if the overall market capitalization of all cryptocurrencies is above $5 trillion, we might slowly perceive cryptocurrencies and a potential massive crash as a systemic risk. Right now cryptocurrencies can't really do much in terms of initiating a financial crisis. Other markets are way bigger, riskier and way more dangerous to global financial stability. Just look at the housing market and the price explosion in real estate facilitated with newly printed money. Bubble?
The way the financial systems are linked and the massive use of leverage, small problems can quickly snowball and become systemic. That's why you're seeing Janet Yellen start to talk about the risk posed by cryptocurrency because it's completely unregulated and operates in the dark. Nobody knows if or how big of a problem crypto could spark, and that's a problem.
There is some truth to what you are saying, but there is also a difference between fiat money where you can create 9 dollars of inexistent credit money for every 1 dollar deposited in a bank account and cryptocurrencies where a bitcoin is a bitcoin, no matter what. You can trade crypto with leverage here and there, but you can't create a legal bubble like you can with fiat. What you can do is pump up bitcoin with printed Tether, but that can't be legal unless there is a real dollar (which in essence is a fake dollar) for every single USDT printed on the blockchain.
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
I don't think that there is a lot risk coming from crypto currencies to be the root of evil of the next financial crisis. We have been in a zero interest rate world for more than 10 years already. This interest rate makes loans so cheap which is making huge messes in the financial world. Everybody can get a loan for almost free right now which made real estate very expensive. Buying an apartment or house right now will put us in debt for the next 30 years. I think we will see another crash in the real estate bubble.
As of now there isn't even a slight chance for cryptocurrencies to become the root of evil for the next financial crisis. Maybe if the overall market capitalization of all cryptocurrencies is above $5 trillion, we might slowly perceive cryptocurrencies and a potential massive crash as a systemic risk. Right now cryptocurrencies can't really do much in terms of initiating a financial crisis. Other markets are way bigger, riskier and way more dangerous to global financial stability. Just look at the housing market and the price explosion in real estate facilitated with newly printed money. Bubble?
The way the financial systems are linked and the massive use of leverage, small problems can quickly snowball and become systemic. That's why you're seeing Janet Yellen start to talk about the risk posed by cryptocurrency because it's completely unregulated and operates in the dark. Nobody knows if or how big of a problem crypto could spark, and that's a problem.
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
I don't think that there is a lot risk coming from crypto currencies to be the root of evil of the next financial crisis. We have been in a zero interest rate world for more than 10 years already. This interest rate makes loans so cheap which is making huge messes in the financial world. Everybody can get a loan for almost free right now which made real estate very expensive. Buying an apartment or house right now will put us in debt for the next 30 years. I think we will see another crash in the real estate bubble.
As of now there isn't even a slight chance for cryptocurrencies to become the root of evil for the next financial crisis. Maybe if the overall market capitalization of all cryptocurrencies is above $5 trillion, we might slowly perceive cryptocurrencies and a potential massive crash as a systemic risk. Right now cryptocurrencies can't really do much in terms of initiating a financial crisis. Other markets are way bigger, riskier and way more dangerous to global financial stability. Just look at the housing market and the price explosion in real estate facilitated with newly printed money. Bubble?
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
I don’t think that now cryptocurrency is such a massive occupation that it can have a big impact on the economy of one country or especially throughout the world. But, on the other hand, there are more and more people on the crypto market who come and start investing. I hope that people make their decision of entering the crypto market wisely and they don’t take loans for trading that they can’t pay off then what could be destructive for the economy.
Bitcoin is the largest disruption of financial systems in world history. There are a lot of entrenched government systems and institutional business models that are going to go the way of BlockBuster. For many, this disruption will feel like a financial crisis. At the same time, debt levels globally are cascading towards some pretty scary consequences. Crypto is to blame for the disruption of the old monetary system and likely to get blamed for fiasco central banks have caused.
Steeley
Steeley
I don't think these two things ( mortgage backed securities and cryptocurrencies ) have anything in common what so ever. First off this would be assuming that the cryptocurrency market at as a whole is flawed , unsustainable and back by falsehoods. I don't believe this to be the case so I do not think that this is anything like what cause the crash of 2008 or better known as the Great Recession.
There are a lot of interesting technology and ideas in the cryptocurrency space. But there is far too little attention being paid to the downsides. Crypto needs regulation to be safe to not lead to the next financial crisis. Maybe it experiences a lot of downfalls but still it will never be the reason that it end in financial crisis because as long as it gives even small profit, it helps a lot. Cryptocurrency experience great recession on the year 2008 and I hope it will never happen again. 
I don't think these two things ( mortgage backed securities and cryptocurrencies ) have anything in common what so ever. First off this would be assuming that the cryptocurrency market at as a whole is flawed , unsustainable and back by falsehoods. I don't believe this to be the case so I do not think that this is anything like what cause the crash of 2008 or better known as the Great Recession.
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
Wait a minute is this suppose to be a crypto crisis or financial crisis been caused here.... if it's crypto leading to a crypto crisis because some financial giants are all turning to crypto I don't think that's possible today,central banks have safe fails against this and in a case of crypto failing I think a crash is what we could have and not a crisis. The economic financial crisis with the crypto market crash that is happening right now are two different things and there is no correlation between the two. because we know that cryptos like bitcoin and altcoins are not integrated with economic problems directly and indirectly this will not be a cause or obstacle in the economy.
crypto crash was over but prices are starting to normalise again tho i agree with you . its true that cryptos are different . not all are required to use a crypto so not all are going to get affected if theres a crash that will happen in cryptos but all of the people uses a local currency or fiats and when theres a financial crisis that occurs , majority are going to get affected . cryptos can infact help with this problem instead of causing a problem
There is always a correlation, because everything is interconnected and does not exist in an airless space, just this correlation takes different forms and dependencies. In any case, the current price of bitcoin is higher than what it was immediately before the pandemic, and it was the pandemic that played the role of a trigger that caused the growth of the exchange price of bitcoin and other cryptocurrencies. And if at first the price of bitcoin increased against the background of the catastrophic impact of the pandemic on the world economy in the form of a lockdown and bitcoin acted as an analogue of a protective asset for investors, then the price collapsed, among other things, due to some recovery of the world economy and a decrease in crisis phenomena.
sorry but let me correct something. I think you're a little misunderstanding what the previous thread meant.from before I never mentioned that the bitcoin price was damaged by the pandemic but I did mention the current economic crisis that is happening and causing losses everywhere due to the pandemic.
and if you look at the thread made by the OP then there is no correlation there between the fall of btc and the current economic crisis because it is not related at all.
and if you connect the pandemic with bitcoin it will feel makesense when btc experiences a price spike due to the pandemic because at that time there was a news that said that at that time USA policy pushed the demand for Bitcoin to increase.
The economic financial crisis with the crypto market crash that is happening right now are two different things and there is no correlation between the two. because we know that cryptos like bitcoin and altcoins are not integrated with economic problems directly and indirectly this will not be a cause or obstacle in the economy.
I understand better when the current crisis is caused by a pandemic that has occurred for 2 years now and is still continuing which causes at least losses in almost all sectors.
There is always a correlation, because everything is interconnected and does not exist in an airless space, just this correlation takes different forms and dependencies. In any case, the current price of bitcoin is higher than what it was immediately before the pandemic, and it was the pandemic that played the role of a trigger that caused the growth of the exchange price of bitcoin and other cryptocurrencies. And if at first the price of bitcoin increased against the background of the catastrophic impact of the pandemic on the world economy in the form of a lockdown and bitcoin acted as an analogue of a protective asset for investors, then the price collapsed, among other things, due to some recovery of the world economy and a decrease in crisis phenomena.I understand better when the current crisis is caused by a pandemic that has occurred for 2 years now and is still continuing which causes at least losses in almost all sectors.
I don't think that the pandemic alone caused Bitcoin to go for a bull run. I think Bitcoin was just ripe for a move. It is not like people had more money during the pandemic that they could spend on cryptocurrencies or that they had to use cryptocurrencies more because digital payments were preferred or even required. I think it was really just time to take it to the next level. Everybody was prepared and eagerly waiting for it.
The economic financial crisis with the crypto market crash that is happening right now are two different things and there is no correlation between the two. because we know that cryptos like bitcoin and altcoins are not integrated with economic problems directly and indirectly this will not be a cause or obstacle in the economy.
I understand better when the current crisis is caused by a pandemic that has occurred for 2 years now and is still continuing which causes at least losses in almost all sectors.
There is always a correlation, because everything is interconnected and does not exist in an airless space, just this correlation takes different forms and dependencies. In any case, the current price of bitcoin is higher than what it was immediately before the pandemic, and it was the pandemic that played the role of a trigger that caused the growth of the exchange price of bitcoin and other cryptocurrencies. And if at first the price of bitcoin increased against the background of the catastrophic impact of the pandemic on the world economy in the form of a lockdown and bitcoin acted as an analogue of a protective asset for investors, then the price collapsed, among other things, due to some recovery of the world economy and a decrease in crisis phenomena. I understand better when the current crisis is caused by a pandemic that has occurred for 2 years now and is still continuing which causes at least losses in almost all sectors.
The economic financial crisis with the crypto market crash that is happening right now are two different things and there is no correlation between the two. because we know that cryptos like bitcoin and altcoins are not integrated with economic problems directly and indirectly this will not be a cause or obstacle in the economy.
I understand better when the current crisis is caused by a pandemic that has occurred for 2 years now and is still continuing which causes at least losses in almost all sectors.
I understand better when the current crisis is caused by a pandemic that has occurred for 2 years now and is still continuing which causes at least losses in almost all sectors.
Cryptocurrency will not cause a financial crisis. The proportion of people holding cryptocurrency in the world is very small, and the market value of cryptocurrency is not enough to pose a great threat to the financial system. The financial crisis is caused by the unlimited printing and distribution of money by institutions to cause inflation. Bitcoin is not controlled and restricted by the government, and the total amount is fixed, and it will not be issued.
It is obvious that we should not be worried about crypto "causing" a financial crisis, we should be focusing on how it can prevent one. I have to say that it is obvious for people to mistake what bitcoin is capable of, sometimes they think it is huge but then they realize if it is so huge then when it crashes then it should bring down so many people and create a crisis.The first part of that is true, it is huge, it is over a trillion dollars even after the fall, we broke over 2 trillion dollars at one point, that is bigger than stock market of so many nations so we can clearly say it is huge. However what people do not realize is that even though it is huge, it is not a huge thing that causes crisis, it is a huge thing that helps crisis, in any bad situation if you are in crypto you are making a good profit, because that is what it is there for and that is how you make a profit during bad times.
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
I'm afraid not mate because first Manipulator will only make them slightly profiting because they are also afraid of losing their value when financial crisis happen and there is a possibilities that government will interfere and may lead to confiscation of their wealth.and also in our time now where the government of aware of many possibilities ? they will hinder this to happen specially the biggest countries in the world.
Cryptocurrency will not cause a financial crisis. The proportion of people holding cryptocurrency in the world is very small, and the market value of cryptocurrency is not enough to pose a great threat to the financial system. The financial crisis is caused by the unlimited printing and distribution of money by institutions to cause inflation. Bitcoin is not controlled and restricted by the government, and the total amount is fixed, and it will not be issued.
exactly , 1.5 trillion in totality of capitalization what this will effect to quadtrillion funds around the world?this is just a peanut to consider will lead to economic financial crisis.
Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
This is unlikely, to begin with the market is too small for this to happen so you should not expect this to happen, and second not all crises have to do with a new technology emerging, a great deal of the crises are nothing more but the government manipulating the markets and this creates misallocations of capital in which some markets have not a lot of money while others have too much money creating bubbles in the process, this is what happened with the crisis of 2008, and if anything the dot com bubble was special and when we see the size of the bubble compared to the current size of those companies it is fair to wonder if we can even call it a bubble in the first place and instead we were seeing the growing pains of a new market, something similar to what we see here. The question is how much is enough to cause a financial crisis?
People who come up with similar questions or criticism like yours often forget how much Bitcoin or true crypto have contributed to nations and people's well-being.
All I want and care about is that we do things in moderation and sensible manner for the good people/society.
Fiat and Bitcoin/crypto stakeholders shouldn't feel too insecure about the progress of the other but instead work together & ensure that everyone/nation benefits from their good progress/development
People who come up with similar questions or criticism like yours often forget how much Bitcoin or true crypto have contributed to nations and people's well-being.
All I want and care about is that we do things in moderation and sensible manner for the good people/society.
Fiat and Bitcoin/crypto stakeholders shouldn't feel too insecure about the progress of the other but instead work together & ensure that everyone/nation benefits from their good progress/development
Also, OP should specify whether he is necessarily referring to a global financial crisis or whether he also considers a financial crisis on the national level. As for a global financial crisis, the cryptocurrency market capitalization is still way too small to release a real global crisis. The damage that was caused by the subprime crisis in 2008 was around $15 trillion if I recall correctly and that was real money in that market. In crypto everything is a bit bloated because when Bitcoin's capitalization is $2 trillion, that doesn't mean that $2 trillion were spent on Bitcoin. The numbers are quite a bit off and misleading here.
The question is how much is enough to cause a financial crisis?
People who come up with similar questions or criticism like yours often forget how much Bitcoin or true crypto have contributed to nations and people's well-being.
All I want and care about is that we do things in moderation and sensible manner for the good people/society.
Fiat and Bitcoin/crypto stakeholders shouldn't feel too insecure about the progress of the other but instead work together & ensure that everyone/nation benefits from their good progress/development
People who come up with similar questions or criticism like yours often forget how much Bitcoin or true crypto have contributed to nations and people's well-being.
All I want and care about is that we do things in moderation and sensible manner for the good people/society.
Fiat and Bitcoin/crypto stakeholders shouldn't feel too insecure about the progress of the other but instead work together & ensure that everyone/nation benefits from their good progress/development
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