The latest annual report of the International Monetary Fund has concluded that cryptocurrency does not pose a threat to global economic stability. Or at least not yet.
Every year the IMF published a report detailing the economic state of the world. This year’s is entitled “A Bumpy Ride Ahead” and features a chapter on cryptocurrency.
The report explains that despite the “spectacular appreciation” of crypto-assets over 2017/18, their total market value is less than 3 percent of the combined value of the balance sheets of the four biggest banks in the world. Even at the peak of their popularity, they barely hit 6 percent.
The report notes that the industry is still very concentrated; Bitcoin, Ethereum and Ripple account for 80 percent of all cryptocurrency market capitalization – Bitcoin alone makes up 47 percent. Although there are more than 180 active cryptocurrency exchanges throughout the world, more than 80 percent of trading is conducted at the top 14. Surprisingly, the IMF calculated that an investor would have made more money from FANG stocks (Facebook, Amazon, Netflix, Google) than crypto-assets over the last three years.
Moreover, the groundbreaking release of Bitcoin futures by the Chicago Mercantile Exchange and Chicago Board Options Exchange in December 2017 has not had as big an effect on the world as was expected by some. Futures volumes represent a small fraction of overall trading activity on the CME and CBOE and only 2.3 percent of reported trading in the Bitcoin on cryptocurrency exchanges
For these reasons the IMF has concluded that cryptocurrency poses “limited threat” to the fiat financial system.
Source: Finance Magnates
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.