The $2 trillion crypto market crash won't kill the economy, according to a
6/18/2022, 01:05 PM
Currently, the crypto market is in a state of chaos, with token prices plummeting and companies laying off employees in droves. This has caused many investors to lose faith in the industry, and has wiped out the life savings of many retail traders who bet big on crypto projects. The sudden drop in wealth has stoked fears that the crypto crash might help trigger a broader recession.
While the crypto market's $1 trillion market cap is tiny compared to the country's $21 trillion GDP or $43 trillion housing market, U.S. households own one-third of the global crypto market, according to estimates from Goldman Sachs. So there is some degree of national exposure to the deep-sell off in the crypto market.
However, economists and bankers believe that there is no need to worry about a knock-on effect from crypto to the broader U.S. economy for one big reason: Crypto is not tied to debt. Without people using cryptocurrency as collateral for real-world debts, this is just a case of paper losses and will not have any significant impact on the economy as a whole
While the crypto market's $1 trillion market cap is tiny compared to the country's $21 trillion GDP or $43 trillion housing market, U.S. households own one-third of the global crypto market, according to estimates from Goldman Sachs. So there is some degree of national exposure to the deep-sell off in the crypto market.
However, economists and bankers believe that there is no need to worry about a knock-on effect from crypto to the broader U.S. economy for one big reason: Crypto is not tied to debt. Without people using cryptocurrency as collateral for real-world debts, this is just a case of paper losses and will not have any significant impact on the economy as a whole