Bitcoin “blowing up” would cause significant “collateral damage” beyond the cryptocurrency industry, financial commentators have said.
Echoing infamous comments from JPMorgan CEO Jamie Dimon, analysts quoted by the Wall Street Journal over the weekend said that Bitcoin has the potential to infect stocks in the event of a crash.
“Anybody getting more than five percent of their business from crypto, it’s starting to become significant, and you could see their stock prices very quickly collapse,” Joe Kinahan, chief market strategist at broker Ameritrade told the publication.
Apparently, at risk from fallout are companies profiting from the cryptocurrency ecosystem in some way, such as Nvidia, which has seen huge demand for its products thanks to Bitcoin mining.
“Any product that blows up, there’s always collateral damage,” Kinahan added.
The idea that Bitcoin is in a 1990s Internet-style speculative bubble remains all-pervasive among traditional finance circles, a convenient explanation for the surge of users and investment flowing into both the Bitcoin and Blockchain arena this year.
The ICO phenomenon has added to concerns that the entire cryptocurrency industry could implode at any given moment, due to the large number of assets trading freely without any proven use case or value.
Nonetheless, formalized participation involves suitable risk mitigation for any circumstances, with Nvidia able to reposition itself in the event of shifts in mining activity, Cointelegraph previously reported.
“What we’re looking at is a new technology that people are still trying to understand,” Digital Asset Research senior analyst Matthew Gertler reiterated.
Let’s block ads! (Why?)