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The IMF stated that despite the huge sell-off, there have been few spillovers to the wider financial system. In a Tuesday report, the International Monetary Fund stated that the Bitcoin bear markets have not had any impact on global financial stability.

The IMF published today its “World Economic Outlook Update: Doomy and More Uncertain” report acknowledging that crypto markets have experienced a “dramatic sell-off, but not claiming that this has had any impact on the financial system.

According to CoinMarketCap data, Bitcoin’s price fell nearly 5% today, trading at $20,811.94, down almost 5% from its peak of $69,000 last November. The market capitalization of the largest cryptocurrency is now down almost 70% from last November’s record high of $69,000. Virtually all other cryptos are also down and have not escaped this year’s sell-off.

Investors are moving to “risky” assets as they face uncertainty due to Russia’s war in Ukraine, supply chain issues and other macroeconomic factors. Along with equities, bitcoin and digital currencies are considered risky.

The IMF stated that “Crypto assets experienced a dramatic selloff that led to large losses for crypto investment vehicles, and caused the failure algorithmic stablecoins as well as crypto hedge funds. However, spillovers to broader financial systems have been limited,”

The body was referring specifically to the fall of blockchain Terra and its “algorithmic stabilitycoin” comment. Terra was a popular crypto trading platform until May, when its algorithmic stablecoin UST lost it peg to dollar and billions of dollars in investment vanished. Terra’s fallout caused many investors to lose their investments and spread to other parts of the crypto market.

Every institution, from the Bank of England and the Federal Reserve has criticized the idea of stablecoins or said they needed better regulation. Lael Brainard , Vice Chair of the Federal Reserve, stated that Terra’s death was “reminiscent” of historical classic runs and that new technology wouldn’t protect investors from those same risks.

The post The Latest Bitcoin Crash Did Not Have an Affect on Global Finances States IMF first appeared on The Daily Encrypt.



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Angie Byrd