The International Monetary Fund (IMF) made statements regarding the crypto bear market in a report released on Tuesday and said that the current situation has no impact on global financial stability. Here are the details.
IMF, “World Economic Outlook Update: Gloomy and More Uncertain,” released today in the reportacknowledged that the crypto market is experiencing “dramatic” selling pressure, but added that it has not yet hurt the financial system.
Koinfinans.com According to data obtained by Bitcoin, the price of Bitcoin is trading at $20,945, down about 5% today. The largest digital currency by market capitalization has shed nearly 70% from its all-time high of over $69,000 last November. Along with BTC, other cryptocurrencies also fell and could not escape the selling pressure this year.
Investors have turned away from “risky” assets as they face uncertainty over Russia’s war in Ukraine and supply chain issues, among other macroeconomic factors. The IMF used the following statements on the subject:
“Crypto-assets have experienced a dramatic sell-off that has led to massive losses in crypto investment vehicles and failed algorithmic stablecoins and crypto hedge funds, but their spread to the wider financial system has so far been limited.”
The IMF is referring to the collapse of Terra with its interpretation of the “algorithmic stablecoin”. Terra was a popular asset among market traders until May, when its algorithmic stablecoin, UST, lost its value against the dollar and billions of dollars in investment disappeared. As a result, many investors took losses, and the gloom from the Terra crash spread to other parts of the crypto market.
Every institution, from the Bank of England to the Federal Reserve, has since opposed the idea of stablecoins – or at least say they need better regulation.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.