BIG CRYPTO PLAYERS ARE LOSSING IT ALL
Legislation is necessary in the cryptocurrency space because, if institutional capital entered the market and allocated, say, 50 basis points to Bitcoin or Ethereum, people would have gained some since there is a lot of volatility in institutionally owned assets. Although this is nothing new, the market will eventually rebound. This is simply how unregulated cryptocurrencies work. We hope that it will also result in policy on stablecoins and other assets. I believe it will help us focus on policy. Because we lack an institutional bit, we are seeing instability.
Everyone struggles with volatility, of course, but if we think back to a few years ago, a stock named Amazon also saw annual corrections of up to 50% for around 12 years, which played a part in how many people were still trying to figure out what this new firm was. New markets are notoriously volatile, but in a few years, cryptocurrencies will see widespread adoption. There are two types of businesses: those who use leverage and those that don't. If you're brave enough to employ leverage, you'll have to live with the repercussions when the market corrects, as it is currently doing. Celsius is a prime example of a cryptocurrency business that overextended itself.
You sometimes need a major company to sink to $0 in order to make a bottom since it always helps to have long-term capital or a crypto infrastructure company. When a large corporation drops to zero leverage, there is always a good bottom. One firm must always be sacrificed as the process of rebuilding must begin. We are unable to forecast the bottom since we are unsure of its timing.
The fact that Bitcoin and Ethereum are decentralized investments is fantastic news for the crypto economy. Bitcoin is not just in one country; it is present in every country and, prior to the decline, only had a market cap of $880 billion. When compared to financial institutions, the total market value of cryptocurrencies is less than $2 trillion. The majority of Bitcoin holdings are not held by institutions, thus this is a good time for investors to buy Bitcoin because institutions aren't doing so. When institutions start investing, we'll start buying. We simply need to adapt and put up with some volatility at this time because when institutions enter the crypto realm and certain policies are implemented, things could change.
Over leverage is one the reason why those crypto companies are going under. Thanks for sharing.