Looking at the past financial crises that happened, they all seem to have a few things in common, such as the mass adoption of a new financial product or technology (e.g. mortgage backed securities in 2008, dotcom boom in 2000). Given the extent to which institutions (and some influential figures) have been manipulating crypto recently, do you guys think this narrative is likely?
I don't think that there is a lot risk coming from crypto currencies to be the root of evil of the next financial crisis. We have been in a zero interest rate world for more than 10 years already. This interest rate makes loans so cheap which is making huge messes in the financial world. Everybody can get a loan for almost free right now which made real estate very expensive. Buying an apartment or house right now will put us in debt for the next 30 years. I think we will see another crash in the real estate bubble.
As of now there isn't even a slight chance for cryptocurrencies to become the root of evil for the next financial crisis. Maybe if the overall market capitalization of all cryptocurrencies is above $5 trillion, we might slowly perceive cryptocurrencies and a potential massive crash as a systemic risk. Right now cryptocurrencies can't really do much in terms of initiating a financial crisis. Other markets are way bigger, riskier and way more dangerous to global financial stability. Just look at the housing market and the price explosion in real estate facilitated with newly printed money. Bubble?