The IMF Believes Bitcoin Has Evolved Into ‘An Integral Part Of The Digital Asset Revolution’
Our world has been devastated by the Covid-19 pandemic, affecting the lives of billions of people. The toll has been tremendous, with untold suffering, countless deaths, and too many unheard voices. To minimize the suffering of future generations, efforts must be focused on what lessons can be learned from this global catastrophe, and how societies can prepare for future calamities.
Despite spending time and money researching and developing the best ways to implement structured ways of change, our current paradox has revealed that we need to shift our thinking about what change is. Unplanned changes have certainly revealed some important lessons. In the absence of a structured, well-planned change management process, we came up with an alternative method for maintaining efficiency and effectiveness by continually adapting and evolving.
As we have experienced contradictions over the past year, our current situation has resulted in a new awakening. As a result of this paradigm shift, we need to adopt a mindset of adaptation and evolution, which implies continuous adaptation as our new reality. International organizations such as the IMF, World Bank, and UN face greater challenges in navigating their way through global macroeconomic hurdles, corrupt political naysayers in third world countries, and vaccine distribution challenges. What if organizations like the IMF and the World Bank recognize the potential of blockchain technology and digital asset revolution in opposition to the narrative of naysayers?
As part of an effort to take a different path, the International Monetary Fund (IMF) explains how crypto-assets are now integral parts of the digital asset revolution from obscure asset classes. According to a new report from the International Monetary Fund (IMF), cryptocurrency is no longer an obscure asset class within the financial economy, but a growing correlation with the stock market undermines its “investment hedge” role.
In a blog post accompanying the survey, new risks related to the growing interconnection between digital assets and financial markets are discussed. As a result, cryptocurrency assets, such as Bitcoin, have evolved from an obscure asset class with few users to an essential part of the digital asset revolution, according to the article, which adds that this transition is accompanied by financial stability concerns.
Prior to the pandemic, BTC and Ether (ETH) did not usually correlate with major stock indices, suggesting that these assets could help diversify risk for investors by hedging against swings in a wide range of other assets. According to the IMF research, this changed after the extraordinary central bank responses in early 2020, stating that crypto and stocks rose in tandem as investors’ risk appetite grew.
Furthermore, the experts emphasized the need for a coordinated global regulatory framework that would guide national regulation and supervision while mitigating the risks to financial stability.
To conclude — Even though IMF believes Bitcoin has evolved into an “integral part of the digital asset revolution”, it cautioned caution should be exercised due to the high correlation between cryptocurrencies and traditional holdings like stocks, which has the potential to cause contagion across financial markets. Now that we have entered the year 2022, let’s hope that the adoption of crypto will open up endless possibilities. Let’s hope organizations like IMF and World bank can recognize the potential of the digital asset revolution to counter the narrative of naysayers.
TEAM ALPEX Global