Will crypto lead to the next financial crisis?

[roosbit]

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.

[ChiBitCTy]

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.

[Cherylstar86]

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.

[Steeley]

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

[Bitcoin Seller]

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.

[shogun47]

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?

[jaysabi]

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.

[fulcare]

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.

[zanezane]

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.

[WNTRjon]

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.

[GeorgeJohn]

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.

Government is like support to cryptocurrency because whenever they kicked against cryptocurrencies is the more cryptocurrency get elevated or firm, the crisis's government can is base on what they regulate, so coming to cryptocurrency network nothing they can do that will lead to crypto crisis more especially bitcoin in question, for now adoption of bitcoin is getting influential every minute of the day.

[Wong Gendheng]

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.

Yes right, the government's negative response is the main cause of the crypto crisis, users will panic and sell at any price so that it makes crypto worthless, of course this makes a great financial crisis because the crypto market is currently very large.

[johnyj]

A crisis only happens when people selling something for fiat money, and there is not enough fiat money. If crypto is owned by majority and they want to cash out, there will be a crash. However if they could just spend crypto to buy things, they don't need to cash out, so the fiat money liquidity crisis might be much less. In worst case, we have USDT and USDC that can be printed out of thin air to support the price

[iv4n]

I always watched financial crises as a time of change! Yes, many big ones fall down, some new arise... while ordinary people suffer in that game of power! Usually the ones at the end of the food chain!
I believe that crypto is a new player in that game! The true power of crypto are people behind, there is a strong/rich group of people who stand behind the fiat/monetary systems around the world! We saw many little battles between crypto and government/bank sectors from different countries and looks like crypto is winning, simply because more people are joining, disappointed in traditional institutions!
It will be interesting to see what will happen, I expect some bigger battles in the future! More organized and widespread, probably after some big disaster, like it always happen!

[Rasa nanas]

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.

Yes right, the government's negative response is the main cause of the crypto crisis, users will panic and sell at any price so that it makes crypto worthless, of course this makes a great financial crisis because the crypto market is currently very large.

many people have the wrong perception in this matter, not legalizing does not mean it is a negative response. I'm not too worried about this kind of news because I don't think it will have a big effect on the bitcoin price. Honestly I'm more worried about FUDs made by people like Elon 

[Zam.io]

I always watched financial crises as a time of change! Yes, many big ones fall down, some new arise... while ordinary people suffer in that game of power! Usually the ones at the end of the food chain!
I believe that crypto is a new player in that game! The true power of crypto are people behind, there is a strong/rich group of people who stand behind the fiat/monetary systems around the world! We saw many little battles between crypto and government/bank sectors from different countries and looks like crypto is winning, simply because more people are joining, disappointed in traditional institutions!
It will be interesting to see what will happen, I expect some bigger battles in the future! More organized and widespread, probably after some big disaster, like it always happen!

I agree with your words that crisis is a time of changes.
In my opinion bitcoin and the whole crypto thing shows how it can be - open market for everyone anonymously with no credit ranks. Crypto market is a surgery tool, that shows us how a rotten system we have. And yes, it can lead to mass disappointment in the old markets and therefore results to financial crisis on these markets.

Government and central banks denyed crypto at first,
then they started to launch own crypto products
Because they know, if changes dont come from reforms, they come from revolution. So central authorities are afraid of this foreseeable financial revolution

[fulcare]

I always watched financial crises as a time of change! Yes, many big ones fall down, some new arise... while ordinary people suffer in that game of power! Usually the ones at the end of the food chain!
I believe that crypto is a new player in that game! The true power of crypto are people behind, there is a strong/rich group of people who stand behind the fiat/monetary systems around the world! We saw many little battles between crypto and government/bank sectors from different countries and looks like crypto is winning, simply because more people are joining, disappointed in traditional institutions!
It will be interesting to see what will happen, I expect some bigger battles in the future! More organized and widespread, probably after some big disaster, like it always happen!

I agree with your words that crisis is a time of changes.
In my opinion bitcoin and the whole crypto thing shows how it can be - open market for everyone anonymously with no credit ranks. Crypto market is a surgery tool, that shows us how a rotten system we have. And yes, it can lead to mass disappointment in the old markets and therefore results to financial crisis on these markets.

Government and central banks denyed crypto at first,
then they started to launch own crypto products
Because they know, if changes dont come from reforms, they come from revolution. So central authorities are afraid of this foreseeable financial revolution

That is a one-sided point of view in my opinion. Yes the cryptocurrency space shows that people desire for something that is different from what they are used to, which is first and foremost something that does not support quantitative easing and also raises capital mobility on the individual level, but we shouldn't forget that we are also all better off if we do indeed have some tools in place to get fraud under control as much as possible without sacrificing freedom at the individual level. I know that is a dilemma and it can never really be fully controlled for, but it is in our best interest to find the sweet spot. Crypto has its own set of problems that needs to be addressed.

[oHnK]

That is a one-sided point of view in my opinion. Yes the cryptocurrency space shows that people desire for something that is different from what they are used to, which is first and foremost something that does not support quantitative easing and also raises capital mobility on the individual level, but we shouldn't forget that we are also all better off if we do indeed have some tools in place to get fraud under control as much as possible without sacrificing freedom at the individual level. I know that is a dilemma and it can never really be fully controlled for, but it is in our best interest to find the sweet spot. Crypto has its own set of problems that needs to be addressed.

The financial crisis does not always bring positive changes, for example in my country.  The crisis in 1997 has saddened us to this day, the exchange rate of the Rupiah which was stable against the Dollar is now very low when compared to the Dollar.  The hereditary state debt has become the biggest burden to date.  However, currently crypto does not provide the alleged crisis potential because crypto does not use a qe policy.  Everything is left to the market and if banks adopt crypto then people will realize that there is no need for a central bank anymore.  Because the whole economic system is rotten today is the central bank everywhere.  They are regulators as well as creators of chaos in the economy.

[Vaskiy]

Compared to the marketcap of banks all around the globe what the cryptocurrency market holds is very small. Maybe the growth in a more sustained manner for long years might make some impact when there happens a crisis. In most cases the wrong policies, lack of transparency, and corruption is the sole reason for any form of financial crisis. When there is possible chances of correction through blockchain technology and adoption of bitcoin financial crisis won't be that effective.

[wahyu wida]

That is a one-sided point of view in my opinion. Yes the cryptocurrency space shows that people desire for something that is different from what they are used to, which is first and foremost something that does not support quantitative easing and also raises capital mobility on the individual level, but we shouldn't forget that we are also all better off if we do indeed have some tools in place to get fraud under control as much as possible without sacrificing freedom at the individual level. I know that is a dilemma and it can never really be fully controlled for, but it is in our best interest to find the sweet spot. Crypto has its own set of problems that needs to be addressed.

The financial crisis does not always bring positive changes, for example in my country.  The crisis in 1997 has saddened us to this day, the exchange rate of the Rupiah which was stable against the Dollar is now very low when compared to the Dollar.  The hereditary state debt has become the biggest burden to date.  However, currently crypto does not provide the alleged crisis potential because crypto does not use a qe policy.  Everything is left to the market and if banks adopt crypto then people will realize that there is no need for a central bank anymore.  Because the whole economic system is rotten today is the central bank everywhere.  They are regulators as well as creators of chaos in the economy.

I also feel that until now the usd dollar has felt very high in exchange value since the economic crisis in 1997. But also what makes it difficult for us is the economic system related to politics, and of course there are various interests that are not all devoted to the people. indeed it is different if crypto does not require a central bank which can actually cut operational costs, but again, the government is in charge of a regulation