The topic of cryptocurrencies has been one of the most recurring in recent days. More and more regulators, institutions and central banks are talking about these types of assets and the outlook is not as positive as expected. Recently, the president, Christine Lagarde, assured the International Monetary Fund at a meeting held on Monday that stablecoins are a pyramid scheme.
She referred to cryptocurrencies that are supported by stablecoins such as the dollar, and which in theory have a value of 1 to 1 with the currency that supports them. To illustrate this situation, Christine Lagarde alluded to the impact of Terra and Luna’s collapse in recent days, which highlighted the apparent reality of stack coins, which occupy a very important place in the crypto market. currencies, but also in the economic system.
Terra recently lost parity with the US dollar. It’s a situation that started at the beginning of the year and caused Luna to fall to one of the lowest points that no one had really expected. If it is supposed to be a stablecoin, it should maintain parity with the currency to which it is pegged, which in this case was the dollar, but that did not happen.
Luna’s fall triggered one of the most severe declines the market has seen in recent months. During cryptocurrency sales, the market lost hundreds of billions of dollars in market value, leaving investors at various levels with significant losses.
For regulators, central banks and institutions related to the economy, this situation has highlighted the problems related to stack coins, but also to the global market. Therefore, they are trying to take measures to stem the conflicts that the use of this type of cryptocurrency can generate among investors.
Cryptocurrencies under scrutiny
In the words of Christine Lagarde, when looking at stack coins in a period of chaos like this, it is quite easy to see the reality of this asset class. She said this during a panel discussion at the World Economic Forum in Davos, where she explained that stack coins are backed by a single asset and that if one promises a return of 20%, it is a pyramid.
In fact, this is not the first time something similar has been said about cryptocurrencies. The IMF president’s comments come after the president of the European Central Bank gave a television interview last weekend in which she claimed that cryptocurrencies had no value.
Similarly, Guggenheim Partners’ chief investment officer said bitcoin could fall further. If it currently hovers around $ 30,000, he said it could soon be worth around $ 8,000, which would trigger a serious market crisis. In addition, he stated that most cryptocurrencies are nothing more than “lumber“.
Also, the idea that stablecoins are a pyramid scheme is not far from the comments of Bill Ackman, who said they are a crypto version of old schemes. He said that when he read about Terra, it struck him as a pyramid cryptocurrency, offering investors a 20% return, which will be generated by demand and new investor momentum.
So far, the Terra issue has been one of the biggest shocks to the cryptocurrency market, prompting regulators to turn a blind eye to cryptocurrencies, but not in a positive way. Some market analysts are pretty sure that a total market crash is on the way, and if this is real, the losses can be unmanageable and leave the market in a rather dark moment.
Other analysts say this is just a downturn and that the market may soon recover, as it has in the past. But the recovery will depend on a number of factors, one of the most important of which is the regulation of cryptocurrencies, which is shaping up to be a little stricter than previously discussed.