No, Bank of England, Crypto is Not the Same as Subprime Mortgage Debt
The Breakdown
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Is There a Risk of Contagion in Crypto?
Most people felt like we dodged a bullet here where it didn't go too much farther than these huge institutions. A large fall in crypto valuations could effect investor risk sentiment more broadly, causing investors to sell other assets that are judged to be too risky and those perceived to have a similar investor base. We saw last year during the dash for cash, that this dynamic can put pressure on the amount of liquidity in the system. There is a possibility of contagion.
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