Will crypto lead to the next financial crisis?

[conected]

I think there is still possibility for bitcoin price manipulation as bitcoin is not yet spread evenly. But I don't think that the title of your post is right. In my opinion government always take full control on country economy. Government can make any regulations that may prevent financial crisis. Actually Bitcoin is just a part of factors that influence economy. For now, I don't see any bad global impact that may caused by bitcoin, actually I think bitcoin can help many new business emergence. I believe that if Bitcoin spread evenly then there is no institutions who can manipulate bitcoin price.

- Agreed, crypto and bitcoin is a small market among many investment markets, its growth can be fast and become the subject of attention of economists but its value is almost a reference and its influence on the global network is extremely low, even in a small scale, it is relatively difficult for this market. The financial crisis can only be caused by the incompetence of the government when they are too passive in supporting and renewing the economy, the most important thing to mention is the issue of corruption, instead of publicity, they often cover up their flaws and lose a large amount of money.

[perryxi2]

if you're talking about the way i think you're talking about a market crash Cryptocurrency crisis, why because if the financial economy is stable, people with high income, of course, have the need to invest in the virtual money market, and vice versa, do you think like me?.

[Liamttw]

The government's additional printing of money led to inflation and ultimately to the financial crisis. Investing in Bitcoin can help people protect their funds from government manipulation and inflation. At present, the market value of cryptocurrency is very small, so it cannot affect the overall economy. It will not have a great impact on the financial system, nor will it cause a financial crisis.

[leetcoiner]

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?

There is too little money in the cryptomarket and too little adoption mass for cryptocurrencies to trigger a financial crisis.
If you are talking about "crypto winter" then it happens regularly and this can be called a local financial crypto crisis, but not a global one.

[Princejebs]

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?

But this schemes didn't last long like bitcoin has did. Beside, many people have claimed that bitcoin and crypto will collapse but it has kept going stronger despite the manipulation by authorities to suppress it value.
The only bad side of bitcoin I have seen so far is Fud. People get scared easily when they hear news but I have these feelings in the future, investors and holders will no longer buy into those Fud and any from of fears created by the government. It makes it even more stronger because we are still above %50 with fibonacci retracement.

[AndySt]

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?

There is too little money in the cryptomarket and too little adoption mass for cryptocurrencies to trigger a financial crisis.
If you are talking about "crypto winter" then it happens regularly and this can be called a local financial crypto crisis, but not a global one.

But the money in cryptocurrencies is gradually becoming more and more Although, of course, to argue that the collapse of cryptocurrencies will serve as a kind of trigger for another financial crisis is a very big assumption that has little chance of being realized in real life. Rather, we can say that cryptocurrencies, on the contrary, have some stabilizing effect on the market, sterilizing the excess money supply that spills out thanks to the policy of quantitative easing before this and the current inclusion of the printing press by governments to support the economy and overcome the negative consequences of the pandemic, but like medicines, these measures have side effects.

[emmybd]

Bitcoin might be a plaything for many—a fun way to experiment with digital cash or perhaps to buy things online that you’d rather people didn’t know about. But others are seriously viewing it as a haven during a financial storm.
Our economies and financial systems are built around fiat money, and they rely on the central bank’s control of the currency (and the government’s ability to issue debt in that currency) to help manage the business cycle, fight unemployment, and deal with financial crises. An economy in which Bitcoin was the dominant currency would be a more volatile and harsher economy, in which the government would have limited tools to fight recessions and where financial panics, once started, would be hard to stop.

[XUNing]

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.

[jossiel]

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.

Yeah, it's the opposite actually.

People from the traditional market and investments, they can be in the crypto market and manipulate it just as what we've been seeing with these popular people in the world of investing.

I guess we've already passed on the said crisis and that was when the pandemic started last year.

[shogun47]

Not really. Lets say that "bitcoin is in a bubble" - the amount of bitcoin in the economy compared to other magnitudes is insignificant. Just for the shake of comparison, and I do not consider Bitcoin like tulips, when the crash of the tulips bubble happened, the economy of the country itself did not suffer much. An unlikely massive crash of bitcoin as of now would not make a significant dent on the worlds economy - albeit it would in individual economies including mine.

It's not really a good thing to compare bitcoin to a bubble because bubbles work different and have a different effect, th Tulip Mania didn't affect the economy because rich people are the only ones that buy it and I don't think that not every Dutch bought it and there's the Housing Bubble of 2008, it did affect the economy. I don't think that bitcoin is going to cause a financial crisis because as @ paxmao said, it's not a lot and it represents only a small percentage of the market.

The Tulip mania didn't only affect the rich. One of the problems was that the poorer people started selling tulips of less value as well and since there were already those prime tulips trading at high prices, they also affected the prices of tulips that were usually cheap. At some point the whole thing crashed because they realized that none of the tulips was really worth a lot. It is similar to crypto in so far as a Bitcoin bull run also gives shit coins a boost. The difference is that when the shit coins crash Bitcoin will not crash.

[Ucy]

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

[shogun47]

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

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.

[Silberman]

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.

[rodskee]

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.

[TheGreatPython]

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.

[capcaypro]

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.

[AndySt]

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.

[fulcare]

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 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.

[terrorJR]

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.

[imstillthebest]

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