I think this is the major argument the SEC has that crypto shouldn't be regulated. Without anything underneath it, crypto is by its nature by more volatile - it can increase by 1000 fold in a minute but can also drop to nothing.

If regulated, more people would be drawn to it and any large losses could cause contagion in the rest of the market - people lose a lot on their crypto holdings so sell some of their bonds/stock in a hurry, which lowers the price across the market. Crypto has had several 2008 style crashes and is likely to have more but as yet they haven't effected the rest of the market/economy.