Its accurate that storing crypto is hard for a lot of people
Its also accurate that I don’t care about that and I’m never one of the people pushing for “mainstream adoption”. The alpha exists while it is hard. The Venture Capital exists to bring capital to a place where it is hard. Most of the platforms are financial services. Traditional finance has many obscure financial services that mainstream never directly interacts with and its the same here. In both, there are nuances in having access. You need special hardware and special accounts to be a merchant or payment processor, you need special permission and infrastructure to trade credit default swaps, you have to jump through many hoops to self-custody any paper-claim to an asset. These arent games for mainstream. If you want to jump through those hoops you can.
The vast majority of finance people don't give a shit about the value of the product. Their business isn't to take risk or speculate, that is what your money is for. Their job is to give the people what they want, and earn hard-money commission. That is it.
I will say though: I think crypto is here to say, I think normal finance is here to say, they aren't incompatible. What I think was illogical was to suggest that blockchain was a substitute for very efficiently run operations (like custody)...but it could be used elsewhere (for example, having investment funds do transfers on a blockchain is interesting) because it is also true that other parts of the industry are pre-historic (anything retail-facing is usually expensive and poorly-run, the whole retail fund value chain is a joke).
Thanks for proving my point just five minutes after my post. What makes it difficult to discuss crypto is that people usually mean bitcoin etc. But that's just a single application.
This is easy. You made an analogy to stocks and ignored the entire universe of investments and other asset classes.
Doesn't that tell you all you need to know?
There is a decade old meme of getting stock market gurus to comment about crypto and their sycophants repeating their predictably abysmal view of something outside of their wheelhouse.
Commodities traders never had an issue and volatility is also not an issue in that market. There are no “permabulls” in commodities outside of a few rare metals, and trading in those markets primarily factors in seasonal and cyclical supply and demand.
Buy and hold works ok in some crypto assets. But the permabulls that never traded anything else, and the stock market investors that keep a stock certificate their grandma gave them 20 years ago should just not be in this market.
You are conflating “good” investment vehicle with “valid” investment vehicle, where its a mixture of whether being a permabull works alongside whether enough institutions that you respect have said positive things. make your own choices about what you want to trade.
Tell that to the vast majority of crypto holders who cannot master the underlying technology of crypto and therefore rely on the exchanges. Crypto is not contiguous with your highly selective, normative definition. Crypto is everything done by everybody buying, selling and building tech for crypto.
You did suggest that, even concluding with “That's the world of cryptocurrency” to re-affirm the equivalency of the comparison.
This framing is disingenuous. Crypto proponents do not suggest holding all assets in a single key and leaving it in a vulnerable location. It would be like suggesting that investing in fine art is futile because investors might accidentally drop their Picasso painting on the way to the restaurant.
Many outspoken proponents advise against “CeFi” including centralized lending services like Celsius. Meanwhile with Aave, which is analogous to Celsius and is actually DeFi, the protocol is still doing fine and the users still have access to their funds. This goes against the general tone of your statements, and is an example of Web3 product that is actually continuing to demonstrate its effectiveness.
1) There are enough goods, services, and investments in the crypto ecosystem that this distinction doesnt matter. Even an increasing number of non-crypto related hedge funds accept crypto as the capital investment for a new limited partner, as long as their fund admin accepts it. Any individual or business can skip local capital controls, or financial institution imposed scrutiny, or merely skip worse service hours.
2) there is enough liquidity to convert $100mm in bitcoin to $100mm in dollars. I would expect intermediaries to take about 50 basis points or less in a combination of fees and slippage. percentage based compensation adds up, but its not different enough. But yes, there are intermediaries if that truly was your only point.
pretty much everyone who has got into crypto outside of early adopters has bought through an exchange. And a lot of it sits on exchanges or in centralised wallets. Unless you're a drug dealer or other criminal, or a miner, you do not have significant assets sitting in crypto that are hidden to any great effect
I'm confused. They both relate to each other, don't they? For crypto to reach and be accepted by the mainstream, people need to know that everything is being done to prevent people from being scammed. It's surprisingly easy to fork an existing cryptocurrency and create your own. Anyone could create a new coin in a couple of hours, most of the time spent on the marketing site. For crypto to be accepted beyond speculators and Twitter investors, there needs to be protections in place, just like investing in the stock market is regulated somewhat.
I don't agree. I am active in different areas of the crypto space. You would be surprised to hear how few (big) bitcoin owners own traditional stocks or participated in the GME pump and dump.
Crypto finance is no different than regular finance. Same products, same mechanisms within those products, etc just without any regulation. And now people are starting to understand why regulations exist.
As an investor in crypto, I feel very confident that I am getting what I'm paying for. The basic facts about a coin or token, like how many are supposed to exist, are completely verifiable on some sort of public blockchain. That is the safest possible system.
In contrast, the stock market is a total mystery box as to even how many shares are even being traded with all of the tomfoolery with shares being borrowed and sold short, dark pools, and lots of crazy things that you'd need a decade in finance to even begin to understand.
This is a completely absurd take. There are bilions of dollars of inflation trades every single day in interest rates markets. It’s enormous.
The reality is that most crypto proponents have zero experience in capital markets and its plumbing. Your assertion that it’s simpler to do on blockchain is wrong is almost every single facet, and I’m happy to enumerate them if you’re interested.
Its also accurate that I don’t care about that and I’m never one of the people pushing for “mainstream adoption”. The alpha exists while it is hard. The Venture Capital exists to bring capital to a place where it is hard. Most of the platforms are financial services. Traditional finance has many obscure financial services that mainstream never directly interacts with and its the same here. In both, there are nuances in having access. You need special hardware and special accounts to be a merchant or payment processor, you need special permission and infrastructure to trade credit default swaps, you have to jump through many hoops to self-custody any paper-claim to an asset. These arent games for mainstream. If you want to jump through those hoops you can.
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