News Tech: The International Monetary Fund (IMF) issued a thorough blog article on Sunday, August 21, outlining how cryptocurrency prices have been edging closer to Asian equities markets and why this may be cause for concern.
According to IMF, cryptocurrency was mostly protected from the financial system before to the outbreak. Bitcoin and other cryptocurrencies did not pose any significant stability threats to the financial system because of their low connection to Asian equities.
Asian investors invested heavily in the cryptocurrency industry during the massive bull run that occurred between 2020 and 2021. Retail and institutional investors from Thailand, Vietnam, and parts of India are included in this. As a result, cryptocurrencies have demonstrated a better level of integration into Asia’s established financial systems.
The popularity of cryptocurrency trading increased as a result of the region’s easy access to low-cost borrowing, drawing in millions of traders. The 2021 cryptocurrency bull run saw significant participation from Asian investors, increasing the market valuation of cryptocurrencies to reach than $3 trillion.
The IMF notes that there may be a number of factors contributing to the stronger connections between Asian equities markets and cryptocurrencies. Along with increased use by institutional and retail players, platforms and investment vehicles for cryptocurrencies are also becoming more popular, and OTC markets for cryptocurrencies are expanding.
As the use of digital assets increases in Asia, investors may become more aware of the hazards associated with cryptocurrencies. The governments of India, Vietnam, and Thailand have recently implemented new regulations, which are applauded by the IMF.