The Subprime Mortgage Crisis of 2008
The subprime mortgage crisis of 2008 was a major financial event that had wide-reaching global implications. It is widely regarded as the most significant contributor to the Great Recession, which lasted from late 2007 to mid-2010 and caused widespread economic hardship across the world.
What Caused The Crisis?
The rapid expansion of subprime mortgages in the United States during the 2000s created an unsustainable housing market bubble. When interest rates began to rise, many borrowers were unable to make payments on their loans and defaulted, leading to massive losses for banks and other lenders who held these mortgages. This sparked a chain reaction in which banks became increasingly unwilling to lend money due to fears of further defaults; this credit crunch led businesses around the world struggling with liquidity issues and forced them into bankruptcy or out of business altogether.
Impact on Cryptocurrency Markets
The subprime mortgage crisis had a significant impact on cryptocurrency markets as well, particularly in terms of public perception. Investors saw cryptocurrencies as an alternative asset class that could offer protection against traditional stock markets in times like these, prompting increased demand for digital assets despite bearish macroeconomic conditions at large – leading some analysts even referred to Bitcoin’s 2017 bull run as “the great crypto escape from traditional markets” .
On top of this direct effect on investment decisions however it also indirectly shaped how governments approached regulating cryptocurrency trading platforms: In 2018 for example South Korea implemented its own version of Dodd Frank Act rules (which were originally enacted after 2008) with regards licensing requirements for exchanges operating within its borders – underscoring just how long reaching effects can be felt from such events even years down the line..
