Topic: Will crypto lead to the next financial crisis? - page 7. (Read 1265 times)
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.
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?
It is true that we had many narratives whenever there was a global economic crisis and it happens whenever the market reaches a point of speculation that would rally without making much sense and eventually it will lead the market to fall unconditionally and hopefully we will not see that situation here.We are already struggling with the pandemic situation and many countries are printing more money and pumping in the market and it might create an issue in the coming years and we might even see inflation in the market and if everything aligns in the same path we might see another 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?
No, there will be a financial crash sooner or later. However, this crash will not be triggered by Bitcoin, but by irresponsible financial policies of many governments and central banks worldwide. Bitcoin and Co. will then be a safe haven for ordinary people, just as Satoshi once intended.
The crypto market has improved a lot through blockchain technology to is difficult to say whether crypto will lead to the next financial crisis but the future of crypto is much better because of the rate at which millions of dollars are being invested in the crypto market even if the prices of currencies fall if the amount of investment increases the market will rise again. Just as banks cannot create virtual currencies it prohibits the creation of any money other than blockchain programmed and slow crypto will go a long way in terms of technology.
You need to know first how much Bitcoin total market capitalization between all fiats exist in this world, based on this site Bitcoin market capitalization dominance is only 0.53 % [1] not even enough to reach 1% right now. It's really small and doesn't affect majority of people, if Bitcoin dominance is already 20-30% of course people will panic and could face financial crisis.
Bitcoin crash is a temporary financial crisis for those people who buy Bitcoin on the peak before
[1] https://fiatmarketcap.com/
Bitcoin crash is a temporary financial crisis for those people who buy Bitcoin on the peak before
[1] https://fiatmarketcap.com/
It may or may not happen, but definitely not now nor the next year or two. The crypto market is still a small market. Considering that it is global in scope and that it is made up of thousands of different projects, a trillion market cap is still considered low. Who are the players in the Bitcoin market, for example? There are a few institutions, huge names in finance, some in technology, and the rest are retail investors. I don't know how it could trigger a financial crisis. Perhaps in the decades to come when the market cap is already reaching hundreds of trillions.
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?
The thing that caused the housing bust and the dotcom bust was reckless buying, not new financial products. So in that regard, bitcoin certainly looks like it is subject to reckless buying quite frequently, which is why you have these sharp contractions. As for causing a financial crisis, no, I don't think so. It's not nearly big enough or tied into the financial system in a significant way to cause a financial crisis. Bitcoin could go to zero without much significant consequence for the overall financial system.
Not that the entire blockchain will be packaged and added together. There is no other reason, the magnitude is not enough. In addition, the blockchain as a whole is also a relatively isolated market, and has nothing to do with other financial markets. In the future, no matter how high the market value is, it will be difficult for an isolated market to cause turbulence in the entire financial system. If it is related to the bank securities system in the future, it is hard to say.
Bitcoin is independent of the market and has nothing to do with the real economy. A well-known investor believes that Bitcoin is a "limited edition digital cultural relic". It is a cultural relics market and has nothing to do with other financial markets. It is a group of cultural relics lovers. Pleasure trading, "I do not deny that this matter itself is a market that will continue to exist, but now it has nothing to do with our real life." How can an item that has nothing to do with our lives lead to a financial crisis? ? All in all, Bitcoin is that people think that he is valuable and he is valuable. When people think that he is worthless, he will be useless. The financial crisis caused by the Bitcoin crash can be said to be very unlikely!
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?
hello sir, in my opinion bitcoin is currently in its peak era and will have a bad impact on global finance, for example, now many people flock to bitcoin when bitcoin reaches its peak, and when it is below people who were at the top will be forced to go down and the economy they are very disturbed so the biggest threat is when bitcoin peaks there will definitely be a very sharp derivative, it will greatly affect the financial system
Crypto bubble was/is still small compared to dotcom bubble or the housing bubble, so it won't have any macroeconomic effects. Institutions only started investing in Bitcoin in this cycle, and they don't touch altcoins, and they didn't put even that much money into it. Bitcoin can go to zero tomorrow and these institutions won't bat an eye.
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?
Cryptocurrency capitalization is not yet large enough to have a significant impact on the global financial system and pose any threat to it. This has already been stated many times by various gatherings of representatives of states, including the G20 countries, as well as specialized government bodies, as was the case recently in the United States. In addition, cryptocurrency is practically not connected with the economies of states, and therefore cannot cause a global economic crisis. Such claims have no economic basis. 
The events leading to the dotcom bubble and the 2008 financial crisis required tons of investments and money from traders and normal people alike to happen—an amount which isn’t even comparable to the total crypto market capitalization. Perhaps it could be a precursor to something bigger than itself, but I do not see the crypto hype leading to a financial crisis given that traditional assets such as stocks are also receiving an insane amount of money injection for the past decade.
If you study the history of bubbles and economic disasters, you will find that the collapse was the end result of a long series of catastrophic mistakes represented in weak supervision of the banking sector, inequity in the distribution of capital and random printing of money. The current financial system is like a domino stone, which means that the collapse of any part will ultimately lead to a global financial crisis, so the question is when will it occur, not the causes, or the correct time when the straw that will split the camel’s back will come.
The believe institutional Investors have in the network is increasing, but that's cause there is already a financial crisis/inflation, which wasn't caused by Bitcoin in the first place, but prolly by the pandemic and printing of more money to control the pandemic, thus, Bitcoin or cryptocurrencies imo can't cause a financial crisis, but it can be a hedge for people to hold the value of their funds when the economy is struggling and cost of living is skyrocketing due to a reduction in the value of Fiat.
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?
It for sure is but we have to understand that people who are investing in cryptocurrencies are of these types:- (Considering their crypto Investments are not the only investments that they have)
1. Small holders
They are holding small about of cryptos and they can also manage any loss without adverse effects for the long term.
2. Whales
People who have a lot of money invested in cryptocurrencies and these people can take a loss anytime. They already have big companies and if something happens they can just move down their financial class.
3. Traders
They will even make money with the price is down. It's all about the Volatility for them.
-----
I think the chances are low for sure.
I think we are living a financial crisis already due to governments printing money infinitely to maintain a system that doesn't work in a sustainable way. Bitcoin is more likely to be part of the solution than the problem itself, because during crisis times investments like bitcoin can help people to protect their money against corrosive inflation.
You pointed out mass adoption can lead to crisis, but I think we should keep in mind bitcoin supply is limited, while another products or technologies you mentioned weren't.
You pointed out mass adoption can lead to crisis, but I think we should keep in mind bitcoin supply is limited, while another products or technologies you mentioned weren't.
It may lead to the next financial crisis of a little percentage of the population that patronizes Crypto and buy at its peak and sells at a loss when its prices dump. Honestly, what made you (@OP) think that there is a possibility that crypto will lead the world to the next financial crisis? With its little effect on the economy, yes it is emerging but it is not that huge enough to have a disastrous effect globally. Maybe to selective individuals that do not know how to handle their emotions and bought in FOMO and panic sell at a loss.
Just by considering the fact that not everyone knows about crypto nor the world's economy relies on it, we can already see that it wouldn't be the cause for another financial crisis. It is not even legal on many countries still and its value is not even stable due to high volatility so the world would definitely try and be dependent on it. There maybe a crisis in the crypto world at the moment but that does not mean real world will also experience the same thing. Let us know the use of bitcoin more so we wouldn't wonder anymore what it could affect and what it cannot.
I don't think so.
Only 2.8% of the population globally owns cryptocurrency, it's too far on making the next financial crisis just because of cryptocurrency, besides, it's the exact opposite. Fiat is the reason why we are experiencing global crisis, that worsen because of the pandemic, fiat is trash to be honest, because of inflation.
If you'll think about it, the positive things about Bitcoin always outshines the negative temporary bad news about it, like banning cryptocurrency in a certain country and will uplift it after a while.
Only 2.8% of the population globally owns cryptocurrency, it's too far on making the next financial crisis just because of cryptocurrency, besides, it's the exact opposite. Fiat is the reason why we are experiencing global crisis, that worsen because of the pandemic, fiat is trash to be honest, because of inflation.
If you'll think about it, the positive things about Bitcoin always outshines the negative temporary bad news about it, like banning cryptocurrency in a certain country and will uplift it after a while.
Jump to: