From the Desk Of A Trader #7
"Coiners and finfluencers don't see the irony of calling for government regulation and cold-storing tokens off-exchange under their mattresses"
Today, we are happy to share the thoughts from the desk of a soft commodities trader. The following views are that of Martijn Bron and do not represent the views of his employer.
Coiners and finfluencers don't see the irony of calling for government regulation and cold-storing tokens off-exchange under their mattresses, as the answer to the FTX collapse.
Market regulation is a good thing, with the purpose of ensuring orderly, compliant market conduct, and monitoring and acting against bad actors.
I have been part of the Intercontinental Exchange (ICE) commodity advisory group for more than a decade partnering with other stakeholders to help achieve orderly futures markets.
With regards to the crypto space, I believe it needs to be regulated like a gambling franchise, and not like a regular exchange where #commodities or securities are traded, which have a purpose in the broader global economic ecosystem.
Rules for crypto related advertising need to be defined, similar to gambling adds, and the way finfluencers conduct their services.
Crypto finfluencers should be regulated so that it is clear that the tokens they promote are lottery tickets with the expectation to lose all your money. Ray Dalio said 80%.
They should also disclose what their exposure in the tokens is which they promote, that they are paid for their promotions and they should sign a duty of care agreement with regulators, and not doing so leads to regulatory action (to be de(fined)).
Staying up late and waking up early to read about one of the most spectacular periods in financial #markets I read some stuff from crypto finfluencers which I would like to flag.
History has shown that religious conflicts often deal about the purity of ones religion and the one true religion.
In crypto, finfluencers now use the narrative that "BTC is the true religion and has nothing to do with crypto", referred to as sh*tcoins.
It seems to be related to BTC's attribute of a limited supply and energy guzzling POW system. Despite this, BTC collapsed 70%.
"There are proven network effects". This is unsubstantiated marketing buzz. Show me the math please, how does it create use cases, and profitability in the ecosystem?
What is the network going to be used for when people keep their BTC out of it, as after the FTX collapse they are scared to use it, while keeping their BTC in cold storage?
I want to pay a beer with BTC via lightning. I need to get my BTC out of cold storage, put it online (scary) then transfer it to a vendor who accepts it, while the price of BTC is all over the place. The vendor quickly needs to sell it on an exchange as what he wants is real #money, not BTC. Or will he wait till end of day and instead put all the BTC he receives in cold storage and do the sales transaction later, uncertain about his revenue?
Not user friendly and efficient, but we are told it is the future.
Finfluencers advise using options in crypto #trading, as options reflect "defined risk"
What they don't say is that the majority of options expire worthless so you lose 100% of your investment, the premium. Or do they expect uncle Joe to gamma trade his BTC exposure?
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