As the Bitcoin (BTC) price flirts with $24,000 again, the crypto community has allowed itself some optimism. But that’s not the case with the International Monetary Fund (IMF), which is issuing a warning about the price of cryptocurrencies.
Cryptocurrency prices could fall further, IMF says
This pessimistic outlook was stated by Tobias Adrian, the head of money and capital markets for the IMF. In an interview with Yahoo Finance, he explained:
“We could see further selling, both in crypto-assets and in risky asset markets, like equities. “
The IMF bases this analysis on the fallout from the Terra (LUNA) deal. The collapse of the project created a tidal wave in the ecosystem, which caused other large platforms to plunge. And it could continue, according to Tobias Adrian:
“There could be further failures in coin offerings – especially in algorithmic stablecoins, which have been hit hardest, others could collapse. “
These are indeed complicated times for these types of cryptocurrencies. The USDD, Tron’s algorithmic stablecoin, has only recently managed to regain parity with the dollar. All stablecoins have come under particular scrutiny from regulators in recent months.
Regulate again and again
Unsurprising conclusion from the IMF: more regulation of cryptocurrency markets is needed. The institution admits, however, that the market is too vast to do so on a case-by-case basis. It therefore welcomes initiatives that lock down access points:
“Regulating [cryptocurrencies] themselves is going to be difficult, but regulating access points like exchange platforms and wallet providers […] is something very concrete and very doable. “
The IMF further stresses that the cryptocurrency sector is sufficiently unconnected with the “traditional” finance sector that there is no risk of contagion.
Bitcoin raises its head (a bit)
If you look at the market as a whole, you can see that the price recovery is somewhat weak. The Bitcoin (BTC) price seems to be struggling to regain the psychological threshold of $25,000:
Bitcoin (BTC) is stumbling over $25,000
The last few months have certainly put stablecoins in the spotlight. These crypto-currencies are of particular interest to regulators and institutions because they have a foot in the door of traditional finance. So are we seeing a necessary clean-up, or a new wave of restrictions? The months to come will tell us.
