Crypto Markets Are ‘Larger Than Subprime Mortgages Before The Financial Market Crisis’ – Bitcoin News

Pablo Hernandez de Cos, governor of the Bank of Spain, has warned again about cryptocurrencies and the growth the crypto market is experiencing. Hernandes de Cos stated that while the market is still relatively small at a global level, the cryptocurrency market is now larger than subprime mortgages before the financial crisis around 2008, and ties to traditional finance continue to grow.

Bank of Spain Governor Warns of Crypto Expansion

The governor of the Bank of Spain has warned of the risks of mixing the growing cryptocurrency markets with traditional financial institutions. Closing out an event, Pablo Hernandez de Cos explained that the interconnection between these unregulated markets and traditional institutions has increased due to the large number of trading instruments launched during this latest bull market phase, including ETFs, futures and investment funds.

In that sense, Hernandez De Cos also stated that “some large private companies publicly announced their interest in using crypto assets for cash management, while others campaigned for it.” This has prompted the governor of the Bank of Spain to warn of the instability this inclusion of crypto variables could have in Spain.

Market growth and its dangers

The growth of the cryptocurrency market in Spain has been exponential, with crypto-related transactions worth more than 60 billion euros ($64 billion) by some estimates. The governor of the Bank of Spain also referred to this, stating that they “must not overlook the fact that this market is already bigger than the subprime mortgage market in the run-up to the global financial crisis.”

Furthermore, Hernandez de Cos explained that the trading volume of some of its major assets, such as bitcoin, ethereum and tether, is already close to the volumes traded by the New York Stock Exchange during some sessions. This and the relative volatility of some crypto assets have led the governor to believe that these markets should soon be regulated.

Hernandez de Cos explained that:

We at the Financial Stability Board (FSB) recently emphasized that, if not properly regulated and monitored, these markets can quickly reach tipping points.

This is not the first time that the Bank of Spain has warned about the risks associated with crypto in traditional markets. In a report released in April, the institution also detailed how the correlation between crypto and traditional markets and the rise of stablecoins could pose various risks to economic stability.

What do you think of the new warnings from the Governor of the Bank of Spain regarding the growth of crypto markets? Tell us in the comments below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. Describing himself as late in the game, he entered the cryptosphere when the price surge happened in December 2017. With a computer engineering background, living in Venezuela and influenced by the cryptocurrency boom on a social level, he offers a different point of view on crypto success and how it helps the unbanked and underserved.

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