Crypto Market Plummets, Coinrail Exchange Hacked and Former FDIC Chair Urges Fed to Consider CBDC
At press time the cryptocurrency market has plunged about $24 billion USD from $321 billion USD to $297 billion USD in the past 24 hours. According to data from CoinMarketCap, all of the top 50 cryptocurrencies are in the red since yesterday, except for Tether (USDT), which is sitting at +0.15%. A report on CCN cites low trading volume and reduced investor demand as possible contributors to the market decline.
"As the market started to gain some stability and small tokens began to outperform major cryptocurrencies once again, investors became more confident in the short-term trend of the market. But, investors dismissed one key factor; the daily trading volume of BTC was merely half of its volume in late April and early May. The demand from investors had notably declined.
The recent correction of BTC can be largely attributable to the failure of bitcoin to continue its momentum from the $7,500 mark due to its low daily trading volume. The downward price movement was not caused by independent events that have occured this week."
Another possible factor in the price drop is news that South Korean cryptocurrency exchange Coinrail was hacked and possibly lost $40 million USD in crypto. Coinrail's website confirmed the hack and assured users that 70 percent of the exchange's accounted for assets had been moved to a cold wallet for safekeeping.
Sheila Blair, former chair of the US Federal Deposit Insurance Corporation (FDIC) urged the Federal Reserve to consider a central bank digital currency (CBDC) in a recent piece on Yahoo Finance. After conceding the "fragility of modern-day financial systems" and acknowledging that Bitcoin (BTC) itself emerged from the 2007-2008 financial crisis, Blair imagines a CBDC as a means to avoid future crises and better handle monetary policy:
"..what if the Fed or other central bank issued their own digital money? Though it sounds radical, the idea is gaining credibility among an increasing number of mainstream economists and central bankers themselves. Presumably, a central bank-issued digital currency (CBDC) would be as stable as traditional fiat currency, while reducing the risk of financial crises and improving monetary policy tools."
Sam Mowers, Investorideas
Read other editions of the Crypto Corner
Get the Crypto Corner News by email Get Crypto Corner News