The European Central Bank (ECB) released a financial review report on Wednesday discussing potential financial instability that could spill over from the US markets. The report also discusses the volatility in the crypto market but insisted Bitcoin has eclipsed the Bubble phase and is no longer behaving like previous financial bubbles such as ‘Tulip Mania’ and the South Sea Bubble.
The surge in Bitcoin prices has eclipsed previous financial bubbles like the ‘tulip mania.’
An excerpt from the ECB report read, “The surge in Bitcoin prices has eclipsed previous financial bubbles like the ‘tulip mania’ and the South Sea Bubble in the 1600s and 1700s.” However, the Financial Stability Review report further claimed that despite the growing popularity of Bitcoin and other cryptocurrencies, they are not a widely used form of payment, and banks around the globe have less exposure to these assets; thus, they pose no significant threat to the financial stability.
Bitcoin falls following China’s ban and Elon Musk’s tweets.
The price of bitcoin fell below $40,000 for the first time since February. At the time of writing, bitcoin is trading $37,700 as it continues to follow downward momentum. The recent fall in bitcoin and other cryptocurrencies came after Tesla announced to suspend its bitcoin payments option less than two months after announcing. And on top of that, Tesla CEO Elon Musk thrashed bitcoin on Twitter, calling the leading cryptocurrency ” “heavily centralized.” Tesla CEO also said that bitcoin is mostly controlled by large mining companies. As reported earlier, China also announced to ban financial firms to not engage in business with crypto firms.