So many have wondered if CryptoCurrency is a problem to world financial stability. However, IMF in his latest annual report has concluded that cryptocurrency does not pose a threat to global economic stability. Or at least not yet.
Annually, the IMF published a report that give details of the economic state of the world. This year’s report is entitled “A Bumpy Ride Ahead” and features a chapter on cryptocurrency.
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The report explains that despite the “spectacular appreciation” of crypto-assets over 2017/18, their total market value is less than three 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 six percent.
The report notes that the industry is still very concentrated; Bitcoin, Ethereum, and Ripple account for 80 percent of all cryptocurrency market capitalisation – 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.