The current downturn within the cryptocurrency market is “a well timed wake-up name,” the ranking company S&P World mentioned in a press release on Friday.
“The shock waves from the crypto-assets downturn in current days has remained primarily inside crypto markets, and affected retail traders essentially the most,” it mentioned.
“And, the current drop within the worth of Bitcoin, the biggest crypto asset, shouldn’t be dissimilar from the one which occurred a couple of yr in the past,” the ranking company added.
The cryptocurrency market misplaced over $1 trillion, or practically half of its market worth, previously 5 weeks.
The S&P mentioned regardless of the comparatively modest dimension of the crypto market, small direct exposures by monetary establishments additional comprise contagion dangers.
“The potential dangers inherent on this ecosystem — solely partly illustrated by the present crypto downturn — underpin the fabric regulatory push that we’re witnessing,” the S&P mentioned.
“Like every innovation, crypto-assets can carry advantages, but additionally dangers. The regulatory mission is a balancing act between each,” it added.
