Can a fall in the crypto market cause a shock to the global financial system?

The price of Bitcoin, the largest cryptocurrency by market capitalization, fell below $30,000 for the first time in 10 months on Tuesday. The main reason for the big fall in the crypto market is the rate hike by the Federal Reserve of America. This has also affected the stock market.

Data from CoinMarketCap accordingCryptocurrencies have lost nearly $800 billion in the past month. In November last year, bitcoin made an all-time high of $68,000. This increased the value of the crypto market to about $ 3 trillion. However, this figure fell to $ 1.51 trillion on Tuesday. Of this value, Bitcoin accounts for about $600 billion and Ethereum’s is $285 billion. Cryptocurrencies have grown rapidly over the years, but despite this the size of the market remains small.

For example, the US securities market is worth about $49 trillion. The Securities Industry and Financial Markets Association of America had valued the US fixed income market at about $529 trillion at the end of last year. Cryptocurrencies started with the retail segment but there has been a rapid increase in interest from exchanges, firms, hedge funds, banks and mutual funds. Despite the small size of the crypto market, the US Federal Reserve, the Treasury Department and the International Finance Stability Board have indicated stablecoins as a threat to financial stability.

Stablecoins are cryptocurrencies that attempt to link their market price to a reserve asset such as gold or common currencies. These are more commonly used for digital transactions that involve converting virtual assets into real assets. USD Coin, Tether and Binance USD Some Popular stablecoins which are linked to the US dollar. Stablecoin, a rapidly growing version of crypto, has emerged as a major medium of exchange. It is often used by traders to remit funds. It is easy to exchange major stablecoins for bitcoin or other cryptocurrencies. Gold coins, a new variant of stablecoins, have grown in popularity in recent months. Gold coins are guaranteed with gold and are pegged to the dollar to reduce volatility. <!–

–>

Latest Tech News, Smartphone Reviews more popular Mobile For exclusive offers on Gadgets 360 Android Download the app and send us Google News Follow on.

Related news