“Others May Fail” – IMF Issues Strong Crypto Warning After Terra Luna Caused Crash Wipes $2 Trillion From Bitcoin, Ethereum and Crypto Market Price – Forbes | Omd Cialis

and cryptocurrency prices have gained some ground after an almighty crash that wiped around $2 trillion from the combined crypto market.

Subscribe to now to Forbes CryptoAsset and Blockchain Advisor and successfully navigating the bitcoin and crypto market crash

Bitcoin price has recovered somewhat after falling below $20,000 per bitcoin in June last year, but remains well below its near $70,000 peak reached late last year as recession fears ravage the Federal Reserve’s outlook. Ethereum price has also recovered from recent lows, with Ethereum co-founder Vitalik Buterin issuing a surprise Ethereum price prediction.

Now, as the shockwaves from the collapse of stablecoin terraUSD and its supporting cryptocurrency Luna continue to be felt, the International Monetary Fund (IMF) has warned “there are others that may fail.”

Do you want to stay ahead of the market and understand the latest crypto news? Sign up now for free CryptoCodexA daily newsletter for traders, investors and crypto curious people

“We could see further sell-offs, both in crypto assets and in risky asset markets like stocks,” said Tobias Adrian, director of money and capital markets at the IMF Yahoo Finance in an interview. “There could be further outages in some coin offerings — particularly some of the algorithmic stablecoins that have been hit the hardest, and there are others that could go down.”

a so-called algorithmic stablecoin that had been growing rapidly in recent months along with its support coin Luna, which was designed to help keep terraUSD’s price pegged to the US dollar, imploded dramatically in May, exacerbating a crypto crash triggered by the Federal Reserve raising interest rates and slashing Covid-era stimulus measures.

The failure of the Terra ecosystem sparked intense regulatory scrutiny of the crypto market, with the U.S. Securities and Exchange Commission stepping up its prosecution of what it considers unregistered securities, and a top VC predicting “this will bring the venture community into the… faces will explode. Meanwhile, billionaire investor Mark Cuban warned of a “nightmare awaiting the crypto industry.”

Terra’s troubles briefly looked like they could spread to other stablecoins, including the two largest, Tether and USDC
but they managed to meet a flood of redemption requests and held their dollar pegs.

Sign up now CryptoCodex—A free, daily newsletter for those curious about crypto

MORE FROM FORBES“It will definitely happen” – Prince makes shock crypto prediction amid Bitcoin and Ethereum rally

“There’s a certain vulnerability there because they’re not backed one-to-one,” Adrian said, referring to Tether, which is backed by a mix of cash, money market funds, US Treasury bills, commercial paper, corporate bonds, credit, and cryptocurrencies. In May, the issuer of Tether said that the stablecoin is now partially backed by “non-US” government bonds, the first time that Tether Limited has admitted that it is buying non-US government bonds in addition to government bonds.

“[Some fiat-backed stablecoins] are backed by somewhat risky assets…it is certainly a vulnerability that some of the stablecoins are not fully backed by cash-like assets,” Adrian added.

Last week, the IMF released a report detailing how the crypto crash “led to large losses in crypto asset vehicles” and “led to the failure of algorithmic stablecoins,” but the fund said it was confident that ” spillovers to the “broader financial system” will remain limited.

“What was very worrying in the 2008 crisis was that banks had a lot of exposure to shadow banking, and we don’t see that exposure of banks to shadow banking through crypto right now,” Adrian said Yahoo Finance.

Leave a Comment