It should be noted that ECB representatives had already touched on the topic of digital assets the previous day. In particular, the organisation's president Christine Lagarde spoke on the Dutch TV programme College Tour, where she explicitly stated the alleged lack of value of crypto-assets.

According to her, proof of this is the recent collapse of the digital asset market, in which many coins - including the most popular ones - collapsed by tens of percent within a few weeks.

On top of that, Lagarde added the ridiculous argument that crypto is not backed by anything, although the same is essentially true of all conventional money. In addition, she said, owners of digital assets should be aware that they can lose everything on their own investments – and supposedly only such people can invest in digital assets.

The fall of Bitcoin and other cryptocurrencies

What’s particularly funny is that in doing so, Lagarde’s son also invested in crypto. Read more about this story in a separate piece.

What are the dangers of cryptocurrencies

This time, representatives of the European Central Bank have focused on the risks associated with cryptocurrencies in the global economy. The results of their own research and observations are in a report titled “Deciphering Financial Stability Risks in the CryptoAsset Markets”.

As we have already noted, the document raised concerns about the increasing pace of integration of cryptocurrencies into traditional finance, essentially making the link between the two worlds tighter. Here is a relevant quote from the document, as cited by Decrypt.

If the current trajectory of increasing scale and complexity of the cryptocurrency ecosystem continues and financial institutions become increasingly connected to crypto-assets, then the latter will pose a risk to financial stability.

Overall, the report focuses on the current risks for individual traders. However, analysts are much more concerned about the prospect of a possible crash in the digital asset market, such as the recent one, which in turn would trigger a commensurate collapse in traditional financial markets.

Experts believe that such a scenario is possible if cryptocurrencies do not receive appropriate changes in regulation and features of integration into the global economy.


We should note that such an approach sounds strange. Still, global experts have repeatedly emphasized that it is the crypto-asset niche that depends on the situation in traditional finance, and not vice versa. This was especially evident the day before, when coins collapsed following the reaction of the S&P500 index and the stock market as a whole.

Cryptocurrency collapse

Be that as it may, ECB experts are comparing the niche of coins to the subprime mortgage that caused the collapse of the global economy in 2008. Here’s a relevant rejoinder.

Despite the recent collapse, cryptocurrencies remain roughly the same size as, for example, the subprime mortgage markets that triggered the 2007-2008 global financial crisis.


It's funny that the bankers chose this particular negative comparison. Obviously, after being exposed to such analogy, people unfamiliar with the coin niche will continue to associate crypto with the crisis and other negative financial instruments. This means that they are unlikely to want to get involved with coins.

At the same time, back in the second half of May, analysts at investment bank Goldman Sachs clearly noted in their report that a possible collapse of the cryptocurrency market would not bring down the U.S. economy. In addition, their conclusion suggests that the same will not threaten the global economy.

Still, the niche of digital assets is very small in size. Today, the market capitalisation of all coins – that is, the product of the number of coins by their exchange rates – is $1.32 trillion.

Cryptocurrency market capitalisation

And this is slightly more than the capitalization of silver. And times less than the corresponding figure for gold.

Ranking of the most expensive assets in the world by capitalization

With this in mind, it seems as if ECB officials are deliberately damaging the reputation of digital assets. Especially their comparison seems ridiculous because the subprime mortgages were perfectly legal, that is, in fact the crisis occurred with the approval of the same bankers and regulators. But in this case, the representatives of the European Central Bank found it more profitable to issue just such a comparison.


We believe that bank representatives have once again confirmed their dislike of cryptocurrencies, trying to change public opinion about this asset category. Again, bankers continue to fail to mention coins' ability to increase in value and deliver excellent returns to investors. And as 2021 has clearly shown, this can only be overlooked deliberately.

Share your opinion on the situation in our millionaires’ cryptochat. There we will discuss other important developments related to blockchain.