Hundreds of billions of dollars in international cryptocurrency transactions circulate globally, primarily propelled by speculative investments, as detailed in a recent report by the Bank for International Settlements (BIS).<\/p>\n
The BIS analysis, released<\/a> on May 8, revealed that cross-border transactions involving the two largest cryptocurrencies, Bitcoin (BTC<\/a>) and Ether (ETH<\/a>), along with the two major stablecoins, USDt (USDT<\/a>) and USDC (USDC<\/a>), combined to approximately $600 billion in the second quarter of 2024, the last observation period covered by the analysis.<\/p>\n \u201cOur research underscores speculative drivers and global funding conditions as significant influences on native crypto asset movements,\u201d the BIS stated.<\/p>\n Nevertheless, the report highlighted that stablecoin and low-value Bitcoin transactions are often motivated by practical applications, particularly serving as alternatives to conventional remittances. The researchers noted that geographical obstacles have diminished impact on cryptocurrency transactions in contrast to traditional finance.<\/p>\n Related: <\/strong><\/em>Spar supermarket in Switzerland begins accepting Bitcoin payments<\/strong><\/em><\/a><\/p>\n Speculative cryptocurrency activities remain linked to \u201cglobal conditions for financing in prominent crypto markets,\u201d indicating an increasing \u201cinterconnectedness\u201d between cryptocurrencies and the traditional financial system, the researchers added:<\/p>\n \u201cAt the same time, we note that stricter global funding conditions, which are known to limit risk-taking in traditional asset sectors, correlate with lower flows. This indicates a growing interconnectedness between crypto assets as speculative elements and mainstream finance.\u201d<\/p><\/blockquote>\n Moreover, specific crypto-related risks and elevated public awareness significantly shape crypto investment flows, reinforcing their classification as speculative assets, according to the BIS.<\/p>\n The observations were disclosed almost a month after the BIS cautioned that<\/a> the count of investors<\/a> and volume of capital in crypto and decentralized finance (DeFi)<\/a> had \u201creached a critical threshold,\u201d presenting a risk to financial stability and global wealth disparity, Cointelegraph reported on April 19.<\/p>\n