Quote from: King Khaizan on August 09, 2021, 02:43:37 AM

According to economic historian from the University of Cambridge, Garrick Hileman, said cryptocurrencies triggered the trigger for the financial crisis. Hileman said the growing number of financial institutions interested in cryptocurrencies created a rapid increase of "systematic importance" giving rise to "systematic risk".

Hileman said this at the end of 2017 to Business Insider, at that time the price of bitcoin was still around US $ 19,000/BTC.

At that time, Hileman said that if there was a crash in the financial market, bitcoin and cryptocurrencies would be more widely accepted. The prediction is accurate, global financial markets experienced turmoil in March 2020 when the corona virus was declared a global pandemic. Since then more and more financial institutions to large companies are investing in bitcoin, the price continues to skyrocket.

In 2017, the price of bitcoin skyrocketed 2000%, to close to US$ 20,000/BTC. At that time, economists in a survey said bitcoin did not have the risk of triggering a crisis, because of its small market capitalization and separate from other financial markets.

The current market capitalization of bitcoin and all cryptocurrencies has certainly multiplied, because the price has moved in the range of US$ 60,000/BTC. Based on Coin Market Cap data, bitcoin's market capitalization is currently US$1.1 trillion.

In comparison, Morgan Stanley Wealth Management, which provides bitcoin access services, has AUM (asset under management) assets of US$ 1.24 trillion as of June 30, 2020, based on data from ADV Rating.

This means that the current bitcoin market capitalization is still under AUM Morgan Stanley Wealth Management.

Meanwhile, the market capitalization of all cryptocurrencies is currently US$1.81 trillion. This market capitalization is also lower than USB Wealth Management's AUM of US$ 2.6 trillion as of June 30, 2020.

The market capitalization of all cryptocurrencies is also much lower than gold which is around US$ 11 trillion.

Even if it is considered that bitcoin's market capitalization is still not large enough to trigger a crisis, Hileman said the integration of traditional financial markets is starting to happen and very quickly. Thus, cryptocurrencies will not only threaten, but could "exacerbate" the crisis if it happens again.

The crisis occurred due to a lack of assets backing and also because of human greed.

These two factors can be controlled using blockchain, smart contracts and oracles. If the security of all issued loans, all issued shares and tokens, all the cash flows of companies and defi projects were available online on some analytics board, then it would be difficult to overestimate them and then drop the price. After all, everything is visible and understandable