The first week of October coupled with some other days has seen bitcoin rise to $257.58 billion in market capitalization.
Bitcoin, popularly referred to as BTC closed with a market cap of $824.62bn in September, according to. It opened trading at $41,551.27 and closed at $43,790.90, with a market volume of $31,141,681,925 on the last trading day in September.
It had a trading volume of $44,025,679,008 and a market cap of $1.08tn. The cryptocurrency has since crossed the $50,000 price, rising to $57,439.17 on Monday as of 7:00 pm Nigerian time.
BTC is making a recovery from the lows of the last four months where it has traded consistently between the $30,000 and $40,000 mark. Since October 5, BTC has traded above the $50,000 mark, maintaining an upward trajectory as the market recovers.
At $57,000, BTC is closer to its all-time price of $64,863 that it reached on April 14, 2021.
What is the IMF saying about bitcoin?
The Managing Director of the International Monetary Fund, Kristalina Georgieva, said BTC and other cryptocurrencies were assets, not money.
The Global Financial Stability Report, released on Tuesday by the global financial institution said that cryptoization – the use of foreign or digital currency by a country—carries significant risks and is an inadvisable shortcut for developing countries trying to boost their economies.
According to coindesk, the IMF report said that cryptoization, such as El Salvador’s recent adoption of bitcoin as legal tender, could hamper central central banks’ efforts to set monetary policy, cause liquidity risks and destabilize economies.
Although the report doesn’t name El Savador, the IMF has said repeatedly that the Central American country’s bitcoin law poses “macroeconomic, financial and legal issues.”
The report highlighted three “challenging transitions” for the global economy: the COVID-19 pandemic, climate change and cryptocurrencies. In recent months, the IMF has expressed deep reservations about the impact of cryptocurrency, even as it tries to encourage innovation that can help the developing world.
To avoid the risks of cryptoization, the report suggested that countries enact policies that could help curtail growing crypto demand, including strengthening monetary policy, safeguarding the independence of central banks, and implementing “effective legal and regulatory measures to disincentivize foreign currency use.”
Additionally, the report suggested that governments in developing countries consider central bank digital currencies (CBDC) that could reduce cryptoization by satisfying domestic demand for improved payment technologies.
The report also identified stablecoins like Tether and USDC as potential threats to the global financial system, and suggested that “substantial upgrades” to disclosure standards for stablecoin issuers, on par with those for commercial banks and money market funds, be used to ensure the stability of the stablecoin market. The booming $120 billion stablecoin industry is largely unregulated – something that has become a sore spot for regulators in the U.S. and globally.
The report also highlighted the risk of runs on stablecoin issuers, citing the panic selling in June that took Iron Finance’s TITAN token to near-zero as an example. Runs could, according to the report, have larger systemic risks, including “trigger[ing] a fire sale of commercial paper”.
“Challenges posed by the crypto ecosystem include operational and financial integrity risks from crypto asset providers, investor protection risks for crypto assets and decentralized finance, and inadequate reserves and disclosure for some stablecoins,” the IMF’s report said.