‘Bitcoin is not an asset that is designed to be leveraged,’ says Caitlin Long


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All eyes are on Bitcoin (BTC), with the biggest cryptocurrency shooting up past $40,000 on Monday. Unsurprisingly, the value enhance occurred shortly after Tesla CEO Elon Musk tweeted that the electric-car firm would potentially accept BTC payments as soon as extra miners verify inexperienced power initiatives. 

But, whereas Musk’s tweet could have pushed the value of Bitcoin up, some business consultants imagine that Bitcoin will not be a cryptocurrency that needs to be leveraged. For instance, throughout an unique interview with Cointelegraph at Bitcoin 2021 in Miami, Caitlin Long, founder and CEO of Avanti Monetary, stated that not like different cryptocurrencies, solvency issues greater than leverage and liquidity in terms of Bitcoin:

“When you get into Bitcoin and also you begin dropping cash, I contemplate that to be actually priceless tuition for actually studying what Bitcoin is. We have loads of new folks on this business now who’re going by means of these classes, and hopefully, of us will study from them. Particularly on this bull market, there’s been a lot leverage added to the system. For these of us who’ve been round a very long time, we’ve discovered these classes a very long time in the past — you do not leverage Bitcoin.”

A regulatory push for Bitcoin and stablecoins

Along with advising that Bitcoin shouldn’t be leveraged, Lengthy talked about that there are new rules for Bitcoin popping out of Washington, DC — one thing she believes has been coordinated with different authorities our bodies. “It was Ray Dalio who stated that Bitcoin’s greatest menace is success — as a result of meaning the regulators are going to be cracking down,” stated Lengthy.

Though this can be, Lengthy identified that rules is not going to ban Bitcoin or different cryptocurrencies, so long as customers comply. She stated:

“The punchline is that if you happen to pay your taxes and also you get regulated, and you do not take shortcuts, you are going to be okay. These which can be making an attempt to commit crimes, or defraud customers, or not pay taxes and never adjust to the legislation, then these individuals are not going to be okay.”

Lengthy additionally famous that rules round stablecoins are a precedence for lawmakers. Specifically, it will be certain that stablecoins don’t infect the U.S. greenback cost system with liquidity threat. To place this into perspective, Lengthy talked about the unintended hard fork that happened for a few hours on Ethereum throughout November 2020, saying:

“On the time, I used to be pondering, ‘What would occur if all of the Ethereum ERC-20 stablecoins needed to be redeemed inside the span of minutes as a result of they needed to be burned on one fork and reissued on one other?’ That isn’t a threat that the standard monetary system has been fascinated with.”

Furthermore, Lengthy commented on the dangers related to stablecoins again in Could, warning that your complete stablecoin market has the potential to bring down other tokens upon a credit score market correction.