Cryptocurrencies are under the microscope as a threat to the global financial system

It’s a secret that crypto assets are being used more these days. As cryptocurrencies like Bitcoin reach the coveted $100,000 price point and many new options enter the market, consumers are quick to take advantage of them. And it gets worse, given how intertwined cryptocurrencies are with the financial world and mainstream politics.

Not only do major companies like PayPal and Microsoft support cryptocurrencies, but the recent US presidential election has seen digital assets become an important point of consideration for candidates and voters. According to reports, new cryptocurrency trading accounts rose by as much as 26% in the days following the election results.

Even with this growing interest in cryptocurrencies, investors are always advised to be rational in their decision making. Specifically, they are required to stay informed about the markets by turning to new, trusted sources and experts in the field. By doing so, they will deduce the best times to buy, which tokens are the most promising, and how to be responsible for their tokens. They should also look to a reliable cryptocurrency marketing organization such as Cryptographic agency Because it helps bring promising and vetted projects to the forefront. By doing this, they can ensure that the projects they invest in translate well to the audience and stay aligned for the best results.

Specifically, some worry that the increasing use of cryptocurrencies as an investment vehicle alongside mainstream assets will lead to a collapse reminiscent of the 2008 economic collapse, which ironically inspired the creation of Bitcoin.

A report from the Federal Reserve Bank of New York noted that leveraged trading (borrowing money to invest in cryptocurrencies and maximize gains) may become a problem over time.

“If enough people start investing in these companies, it could put significant pressure on household budgets, leading to higher rates of delinquency,” the report notes.

It also mentions postal codes With the largest crypto holdings It also reported a significant rise in mortgage loans which could indicate a greater investment in cryptocurrencies.

It is not unusual to hear about people in New York losing money to cryptocurrencies or falling for crypto-related scams. However, this tends to be a small portion of the larger market.

However, while the report worries about the long-term implications of cryptocurrencies, industry stakeholders agree that the use of cryptocurrencies will become more prominent. Besides the obvious financial aspect, digital assets enter the governmental sphere. For example, President-elect Donald Trump has hinted at this Creation of a strategic reserve of Bitcoin in the United Stateswhich has some excitement. Others point out that this link between cryptocurrencies and the US financial structure will marginalize small investors, many of whom turn to cryptocurrencies after being excluded from the mainstream financial world.

This also shows that although cryptocurrencies can be used as currencies and investment tools, most of the focus seems to be on the latter.

As Federal Reserve Chairman Jerome Powell recently said: “People are not using it as a means of payment or a store of value.”

With this investment comes the obvious risk of loss but also theft. Cryptocurrency exchanges are routinely targeted by hackers, Even state-sponsored ones. If the stock exchange is hacked, there is no guarantee that victims will be compensated. Again, cryptocurrency users are advised to make use of reliable sources of information, practice good wallet security, and only invest money they can afford to lose.