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by adam_arthur
1650 days ago
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Even though these are "fees" or "loans", the purpose is speculation. The whole web of connections in the flow of the money is rooted by people speculating to make money. These aren't loans that are made to acquire some intrinsic value, like buying a house, investing into growing a business and so on. People use this liquidity or take crypto loans to try to make more money elsewhere in crypto. Is that right? Is there a tie to the real world in there? To me, this appears quite unsustainable and prone to failure if a risk off event comes. How would crypto have performed during the GFC? It's fallen 80% before even in times where economy has been perfectly fine. The whole ecosystem is ripe to implode due to 0 intrinsic value to owning the tokens that would otherwise cushion a fall in value. Even in a severe recession, cashflowing businesses have value, rental properties have value. Crypto has none that I can tell. |
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>Even though these are "fees" or "loans", the purpose is speculation. The whole web of connections in the flow of the money is rooted by people speculating to make money.
LPs don't have "fees", they just have regular fees, no need for scare quotes.
>These aren't loans that are made to acquire some intrinsic value, like buying a house, investing into growing a business and so on. People use this liquidity or take crypto loans to try to make more money elsewhere in crypto.
I don't have an special expertise on what the crypto loans on Gemini/Celsius are for, beyond what their literature says. However, everything you've said there applies just as well to (secured) margin loans that brokerages make. Do you have the same objections to those?