City & Business News Bitcoin CRASH: Retail investors to ‘bear the brunt’ if cryptocurrencies suddenly COLLAPSE

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HomeFinanceCity & BusinessBitcoin CRASH: Retail investors to ‘bear the brunt’ if cryptocurrencies suddenly COLLAPSE
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City & Business News
Bitcoin CRASH: Retail investors to ‘bear the brunt’ if cryptocurrencies suddenly COLLAPSE
IF BITCOIN and other cryptocurrencies suddenly collapsed retail investors would “bear the brunt” of market losses while rated banks would remain “largely insulated”, a new report by the S&P Global Ratings has claimed.The new information comes at a time Bitcoin and other cryptocurrencies appear to be making a recovery after a period of tumultuous prices.

The report read: "At this stage, we think that retail investors would be the first to bear the brunt in the event of a collapse in cryptocurrencies' market value.

"We expect rated banks to be largely insulated, given that their direct or indirect exposure to cryptocurrencies appears to remain limited."

The S&P Global Ratings financial institutions sector lead, Mohamed Damak, added that a crash in cryptocurrency prices would only make a “ripple across the financial services industry”He stated: "For now, a meaningful drop in cryptocurrencies' market value would be just a ripple across the financial services industry, still too small to disturb stability or affect the creditworthiness of banks we rate.

"We believe that the future success of cryptocurrencies will largely depend on the coordinated approach of global regulators and policymakers to regulate and enhance market participants' confidence in these instruments.”

Bitcoin prices went into free fall earlier this year that saw it dip below the $6,000 (£4294.20) mark.

The volatile virtual currency is worth $11,404 (£8161.84) at the time of writing.