I'm going to talk about stuff I don't understand completely but I have enough knowledge to at least put some ideas on the table and see what kind of conversation arises from it.
I'm not a big fan of Bitcoin's futures, leverage trading, bonds and all that. Call me a crypto trad but, isn't the whole point of crypto to get rid of practices that are the norm in the tradfi world? IF we are trying to get rid of the status quo and provide a tool for the average Joe to become financially independent and money-literate, why are we (or well, centralized exchanges) going down the same road as banks have gone through for a hundred years? and leverage are they friend or enemies?
We've seen countless examples over the years and 3-4 perfect scenarios on how this is not the way we want to go as an integral crypto industry.
I'd say Bitcoin and leverage are enemies
Bitcoin doesn't have an inherent yield, it is a store of value tool with a huge upside, but there's no yield anywhere included in the original code.
Bitcoin came out more than a decade ago, but it was only until 2017 that people began creating products around Bitcoin, one of them being leverage trading, futures and bonds more recently - El Salvador being the biggest advocate of this concept.
Bitcoin before the pandemic was a go, institutional investors, wall street and even banks had bitcoin integration in their roadmap to an extent, but the covid lockdowns and how the governments - and the people - reacted to it pushed BTCs adoption a couple of years back, and now the Terra collapse and the FTX drama alongside the most recent BlockFi fiasco pretty much pushed down BTC's growth by two or even three more years.
What should have happened to bitcoin's adoption in 2021 will most likely happen in 2026. We have dry years ahead of us that's for sure.
But do we really want institutional investors and hedge fund money in crypto? Bitcoin is supposed to be the peoples money*, not another area where the rich can get richer.
The Bitcoin Futures market was a bonanza, people were leverage trading 20:1 with little risk. Bitcoin's scarce nature provides a huge upside, and if you don't believe me ask Michael Saylor.
Bitcoin is called the apex predator of finance and there is no central or governmental entity that will bail it out if it crashes, and at some point all this leverage will be flushed out of the market, this is a healthy thing.
Financial regulators think crypto has finally come to an end and will crash any time now. Some people even believe that the FTX fiasco was artificially created by the establishment to see crypto burn to the ground, I guess we are proving them wrong and we are proving crypto is impervious to what one player, no matter how big it can be, does.
The SEC is concerned about Bitcoin's manipulation. Oh yeah, there is manipulation and big players are doing everything they can to push the price down, or at least that's what I think they are doing. I have no idea if they want to keep the price low to have retail investors lose faith and then artificially create a bull market to take profits or what their angle is, but I just don't believe this recession has truly affected bitcoin, this bear market is here on purpose. To what end I have no idea but I do believe it is artifical.
Not only Bitcoin, other assets are crashing as well and the recession that's been around for a while now paired with inflation levels record, the mid term elections that came by... The scenario is very chaotic, people are waiting for something to happen.
What we are experiencing now is similar to an extent to what happened in 1987 and 2009, these two gave us some experience on how to deal with this scenario but we are now in a digital era, so anything can happen.
A lot of folks have never lived through a real financial crisis. I was too young to remember what happened in 2009 at a market level, all I can say is I've read a lot to be as prepared as possible for the eventual, imminent crisis we are about to experience.
The Bond market is going to crash against everything, 18 months ago they said inflation was going to be transitory and they were wrong and they still saying it will not gonna last that much, think again, kiddo.
But hey, now we have cryptocurrency stablecoins, and FIAT is taking a lot of the leverage of stables which are being printed at an alarming level over the past months to an extent that after the UST crash everyone is pointing at USDC, USDT and algo stables trying to predict which one will crash next.
The Mecanic of the whole global financial system is interconnected so you can't look at just one currency's behavior, that's why US dollar has survive along the years. Bitcoin is a competitor to all the Fiat currencies, and bitcoin is global whereas local currency has to either coordinate with others or succumb to the global adoption of Bitcoin.
But hey, Liquidity issues is probably the main traditional bank problem, that's why the system is collapsing, everything is based on futures, smoke money, something bitcoin should avoid at all costs - which it isn't.
A lot of payments technology in the US and the world are 40 years old and there is a reason for that, there are not better options out there, Bitcoin could be the answer to this, or in this case, CBDCs which are being pushed everywhere as the next big thing in government's tech, but they might be too late to the party.
But both the central system and crypto can coexist, it will be defined who comes out on top by the type of payment one is making and what their end goal is.
My take is, BTC shouldn't thread on TradFi's road, that's not the road we want to take.