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It is small, but has an indeterminate reach throughout the international economy. Nobody knows where the exposures to its collapse would be. A market panic cou
by kingkawn 9y ago
It is small, but has an indeterminate reach throughout the international economy. Nobody knows where the exposures to its collapse would be. A market panic could ensue from such a collapse, followed by other vulnerabilities becoming magnified in importance to the minds of investors.
This of course is a guess, and it could well have little impact. But it seems that the risk is larger than the size of this market would otherwise be in more mature sectors.
- workthrowaway27 9y agoIt will have almost no impact at this point. It's not highly levered or used as collateral in the financial industry. There's no coupling between BTC and the rest of the financial industry.
- freeflight 9y ago> There's no coupling between BTC and the rest of the financial industry. Maybe not right now, but the way things are going I wouldn't be too surprised if it actually ends up happening. I'm also sure plenty of people in the finance industry see this as a good profit opportunity; They might not find the gold themselves, but they will make plenty of money selling shovels to the people looking to find gold.
- pishpash 9y agoWe don't know they're not used as collateral, and it doesn't have to be in the lit markets where this happens. It could be in dark markets in Asia, having knock-on effects on demand or other investments in the real economy. There is also hedging, which automatically couples correlation into other markets.