The cryptocurrency market has shed almost $2 trillion in value, stoking some concern it could hurt the larger economy. Experts aren’t too worried… yet.
Experts don’t see signs of contagion from the crypto dip that could infect the larger economy, as most banks have only recently begun to dabble in it with new crypto-focused offices and, in limited cases, accepting digital tokens as collateral for loans.
The price of bitcoin has fallen by more than half from its high, the value of luna is nearly worthless, and tether, a token that has become increasingly important to how cryptocurrencies trade, needed an urgent rescue last week.
The crypto market is still dwarfed by sectors such as the U.S. housing market, which was worth $43.4 trillion last year. Gold was worth $2.6 trillion at the beginning of the year, and the total market capitalization of gold is estimated at around $10 trillion.
Crypto price swings are not a new phenomenon, but this time the assets are different even from bitcoin and Ethereum.
Nonfungible tokens such as luna (which crashed) and tether (which briefly dipped below $1 last week) saw a surge in popularity last year, but the number of accounts actively buying and selling them has declined by more than half this year.
Crypto hiring had been on a tear before the latest drop in crypto prices. Now, the stock price of the crypto exchange Coinbase is tumbling, and the company is warning depositors that their assets wouldn’t be protected if the exchange ever declared bankruptcy.
Stay updated by checking out the news outlets below:
- Crypto crash: What would it mean for the U.S. economy? NBC News
- Bitcoin prices tumble, the last-ditch effort to save UST, and crypto’s energy use: CNBC Crypto World CNBC Television
- ‘The bulk of newer investors have lost money in crypto’: What’s behind the bitcoin selloff Grow from Acorns + CNBC
- Opinion | Crashing Crypto: Is This Time Different? The New York Times
- Crypto anxiety: Should you worry about crypto crime? The Hill
- View Full Coverage on Google News