The financial crisis of 2008 didn’t materialize overnight. It was the product of systematic deregulation through acts like Gramm-Leach-Bliley, which dismantled the wall between commercial and investment banking.
Fast forward to today, and cryptocurrency’s wild volatility makes the pre-2008 market look positively tame by comparison. Bitcoin’s 10-day volatility exceeded 100% in November 2022. Stable genius stuff, really.
Crypto volatility isn’t just extreme—it’s laughable. When your 10-day swings hit triple digits, stability isn’t exactly your middle name.
Economists are already predicting a recession within the next 18 months. Consumer prices up 3.7% year-over-year. Credit card delinquencies rising.
Now throw crypto volatility into this stew of economic anxiety. What could possibly go wrong?
The interconnectedness is what should terrify anyone paying attention. Signature Bank’s collapse was directly linked to crypto-related withdrawals. Silicon Valley Bank’s failure connected to stablecoin vulnerabilities.
The Federal Reserve itself warns that crypto volatility could affect traditional banking. Yet somehow, the crypto industry is pushing for access to banking services like it’s no big deal.
Most crypto companies operate from jurisdictions with minimal financial oversight. Convenient, right?
Meanwhile, debt rates surged almost 5% in Q3 2023. Young Americans are falling behind on payments.
But sure, let’s allow more consumer loans for crypto trading. That’ll fix everything.
The ECB adviser didn’t mince words, stating Bitcoin has “no real economic necessity.” Harsh, but is he wrong?
The painful lesson of 2008 was that deregulation coupled with financial innovation creates spectacular disasters. The last bear market crash wiped out approximately $2 trillion in crypto value from 2021 to 2022, highlighting the market’s extreme vulnerability. Despite Bitcoin showing signs of maturation with decreasing volatility trends over its 15-year history, we’re still seemingly determined to find out if lightning strikes twice.
Spoiler alert: it does.
