A total collapse of cryptocurrencies would hit retail investors hardest and leave global banks largely unscathed – for now, at least.
The bitcoin bubble bursting would have an "insignificant effect" on global financial stability due to the relatively limited exposure of banks and their so far "cautious approach" to cryptocurrencies.
"In the event of a correction of the cryptocurrencies' valuation, we think that retail investors would feel most of the heat, because we understand that these investors contribute to most of the activity on this market," said analysts at ratings agency S&P in a new report.
Only if cryptocurrencies are classed as an asset will bank's exposure change, though only gradually as regulators around the globe take action when it comes to rules governing cryptocurrencies. But S&P believes it is not an asset.
"Cryptocurrencies are most like a speculative instrument, versus an asset class or a currency. We are of the view that the current version has many characteristics of a traditional bubble," analysts said.
Banks do however face disruption if central banks get involved.
"We think that the creation of a cryptocurrency backed by a central bank that gives citizens direct access to this central bank's ledger is potentially a game-changer to banks as we know them. This does not mean that banks will disappear but it would mean significant changes in the way they do business," the ratings agency said.
And S&P, like many others, believes that the underlying technology of bitcoin, blockchain, will disrupt banks.
"We project that, because of this technology and the growth in other peer-to-peer services, smaller and more innovative market participants could have more opportunities to challenge established banking groups' existing product offering," the research said.