The great crypto crisis is upon us
https://www.ft.com/content/76234c49-cb11-4c2a-9a80-49da4f0ad7dd
Hyun Song Shin, Head of Research at BIS, notes:
There is a bitter irony in the turmoil currently gripping the crypto universe. Crypto was born in the depths of the great financial crisis of 2008 as a backlash against the failings of the conventional financial system, with its overleveraged shadow banks and daisy chain of leverage and maturity mismatch. The original Bitcoin white paper published that same year sold a vision in which money was refashioned as a self-sustaining system of peer-to-peer transfer without the need for intermediaries. However, today’s upheaval bears all the hallmarks of precisely the failings that the industry’s early proponents railed against. As firms collapse and coin prices crash, the unravelling of this new daisy chain of over-leveraged shadow crypto banks is now in full flow.
https://www.ft.com/content/76234c49-cb11-4c2a-9a80-49da4f0ad7dd
Hyun Song Shin, Head of Research at BIS, notes:
There is a bitter irony in the turmoil currently gripping the crypto universe. Crypto was born in the depths of the great financial crisis of 2008 as a backlash against the failings of the conventional financial system, with its overleveraged shadow banks and daisy chain of leverage and maturity mismatch. The original Bitcoin white paper published that same year sold a vision in which money was refashioned as a self-sustaining system of peer-to-peer transfer without the need for intermediaries. However, today’s upheaval bears all the hallmarks of precisely the failings that the industry’s early proponents railed against. As firms collapse and coin prices crash, the unravelling of this new daisy chain of over-leveraged shadow crypto banks is now in full flow.