IMF Suddenly Flips On Crypto As Wall Street Fuels A $200 Billion Bitcoin, Ethereum And Crypto Price Rally

Bitcoin
BTC
ethereum and other major cryptocurrencies have exploded in recent weeks as the market braces for a $15 trillion earthquake.

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The bitcoin price has almost doubled this year (sparking fears that the investment "window" is closing) as traders abandon smaller cryptocurrencies in favor of bitcoin and its closest rival, ethereum after a US crackdown that some believe is part of a plot to destroy the market.

Now, as the world's largest asset manager leads a surprise Wall Street charge on bitcoin and cryptoThe International Monetary Fund (IMF) has suddenly softened its previous attitude towards crypto bans, warning that they "may not be effective."

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MORE FROM FORBES'Opening the Floodgates': Crypto Billionaire Warns 'Window' Is 'Closing Fast' Amid $100 Billion Bitcoin and Ethereum Price BoomBy Billy Bambrough

"While some countries have banned crypto assets entirely due to their risks, this approach may not be effective in the long run," three senior IMF economists. wrote in a blog post on central bank digital currency (CBDC) adoption and crypto regulation.

China cracked down on bitcoin, ethereum and other cryptocurrencies in 2021, driving bitcoin and crypto miners out of the country and briefly crashing the market before crypto firms established themselves in the US and around the world.

The IMF has clashed with El Salvador since the country granted bitcoin legal tender status in 2021, warning of "underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection."

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MORE FROM FORBES'Open The Floodgates': Crypto Billionaire Warns 'Window' Is 'Closing Fast' Amid $100B Bitcoin And Ethereum Price BoomBy Billy Bambrough

Earlier this year, the IMF saying that "totally [crypto] bans must not be ruled out," and called for a "coordinated response" to the cryptocurrency boom that he warned could undermine the global monetary system.

The IMF's softening stance towards cryptocurrencies comes as the US embarks on a cryptocurrency crackdown in the wake of the 2022 market downturn that wiped out $2 trillion of value and culminated in the implosion of major exchange FTX.