IMF to Crypto; Potential Threat?
Unless you’ve been under a rock over the past year, you’ve heard of crypto. Over the past year’s boom and bust, crypto has gone mainstream, an example of Metcalfe’s Law in action: When more folks join a network — whether it is a phone network or number of HODLers of a specific coin, the network becomes more valuable with greater adoption. When more consumers in developing nations acquire their first BTC and hardware wallets, this could increase the network effects, leading to rising prices. Someone else is concerned here: The IMF.
The IMF, otherwise known as the Sultans of Fiat, are concerned greatly about the unpredictability of the crypto markets, as stated in a report this week. The International Monetary Fund, better known as the people that help run the world, sees crypto as a threat to the global markets. The IMF is mainly concerned about volatility: The prospect of getting hacked, losing your private key, you get the picture.
The IMF is also concerned about the explosion of popularity and HODLers in countries without historic faith in their central bank, such as Colombia, the Philippines and Thailand. In these nations, the threat is that these citizens could, due to the lack of trust in their own national institutions, instead would rather take their bets with the crypto market. This of course exposes themselves and the greater market to sudden market swings. When you have folks in these mid income countries put more of their life savings into an investment seen as volatile, and if the market goes down — well, you get the picture.
In the end, no matter what these predictions say and what institutions like the IMF proclaim, crypto is here to stay — volatility notwithstanding.
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