Cryptocurrency a Risk to Financial Stability?
Well I was reading a report where they wrote that the Deputy Governor of the bank of England wants crypto to be regulated as soon as possible.
He thinks that cryptocurrencies may not pose any risk to financial stability right now but this may not be case for much longer.
According to him cryptocurrencies are very volatile and it can make the investors bankrupt who might not be able to pay the debts they have taken from the brokers if this crypto market crashes.
Furthermore according to the report he says that most cryptos like Bitcoin is not backed up in the real world by any asset or commodities, and they are just computer coding and make up more than 90% of the total market cap and this is what makes it volatile.
Well, whatever this guy thinks, one thing I know is to tell you that compare the prices of Bitcoin when it was in 2009 to the prices now. I think it has evolved very much in terms of pricing.
Yes it does go up and down and is volatile, no doubt, but I think we should be playing a bit smarter while buying or selling cryptos.
Definitely we need to do some market research before buying something. And even after doing your market research, it does not mean that one should invest all his money into the crypto market. One should take the risk of the amount of money which he could bear in terms of loss and don't leave one bankrupt.
Blockchain technology can also be availed and use it for good.
But looking at the market cap of cryptocurrencies, it doesn't seem a joke. Many number of people accross the globe are involved in it.
Note: But yeah, you should invest on your own.