IMF notices spillover from Bitcoin crash to Financial System Limited
International Monetary Fund (IMF) “Global Economic Outlook Update: Gloomy and More Uncertain”, July 2022 report is outside. Interestingly, the recent Bitcoin (BTC) crash, amid a “spectacular” crypto selloff, hasn’t actually had a ripple effect “so far” on the global financial system. .
“Crypto assets have seen a dramatic sell-off that has led to heavy losses in crypto investment vehicles and caused the failure of algorithmic stablecoins and crypto hedge funds, but the fallout to the wider financial system has been limited so far. ‘now,’ says the IMF in its latest report.
Bitcoin, which is currently trading at $21,355, per CoinMarketCap, was down 5% yesterday at $20,811, according to reports. This price is a 70% downward spiral of the largest cryptocurrency market cap after hitting a high of $69,000 in November.
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The IMF, in general, views Bitcoin and other digital currencies as risky assets.
Due to the impact of the Russian-Ukrainian war on global supply chains, investors prioritized selling off. The crypto market deteriorated further as the TerraUSD “algorithmic stablecoin” broke away, angering bankers and investors around the world.
Institutions such as the Bank of England and the Federal Reserve have been calling for better regulation of stablecoins ever since. Lael Brainard, Vice Chairman of the Federal Reserve, said Terra’s fall “is reminiscent of classic races throughout history.”