For traditional finance, crypto woes could not have materialised in a handier form. They have disproved claims that prices were uncorrelated to conventional assets. They have shown that investors can easily lose their shirts. And they have had little spillover because the sector is still relatively unconnected and small. For example, the total value of stablecoin assets of around $190bn is less than one per cent of the $50tn market value of US equities.
In the aftermath of the current shakeout, financial watchdogs around the world will need to carve regulated territory from the crypto badlands. Resistance should be helpfully low.
‘Enforcement 40’ for 2020
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