BIS: 2022’s Crypto Crash Had Little Impact On Traditional Finance

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A recent report by the BIS found that 2022’s crypto crash had little impact on traditional finance.
The collapse of Terra and FTX had the most impact on bitcoin investors from emerging economies.
The report claimed that trading activity on major exchanges boomed following the crash.

A recent report by the Bank of International Settlements (BIS) found that the turmoil in the crypto market last year had little impact on the broader financial conditions. Market data gathered by the BIS suggested that there is a weak correlation between crypto losses and stress in the broader financial market.

The crypto crashes induced by the collapse of Terra and the downfall of FTX last year had a devastating impact on the crypto industry. However, according to BIS’s latest bulletin, data suggests that crypto crashes have a limited impact on equity prices or broader financial conditions. This also highlights the fact that the stress in the crypto industry rarely spills over to the wider financial industry.

The following graph takes a closer look at the relationship between crypto adoption and the broader financial system amid the crypto crashes. By looking at the losses…

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