Avanti Financial CEO says Bitcoin shouldn’t beryllium leveraged, portion regulations for stablecoins are underway
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All eyes are connected Bitcoin (BTC), arsenic the largest cryptocurrency changeable up past $40,000 connected June 14. Unsurprisingly, the terms summation happened soon aft Tesla CEO Elon Musk tweeted that the electric-car institution would perchance judge BTC payments once much miners corroborate green vigor initiatives.
Yet portion Musk’s tweet whitethorn person driven the terms of Bitcoin up, immoderate manufacture experts judge that Bitcoin is not a cryptocurrency that should beryllium leveraged. For example, during an exclusive interrogation astatine Bitcoin 2021 successful Miami, Caitlin Long, laminitis and CEO of Avanti Financial, told Cointelegraph that dissimilar different cryptocurrencies, solvency matters much than leverage and liquidity erstwhile it comes to Bitcoin:“Once you get into Bitcoin and you commencement losing money, I see that to beryllium truly invaluable tuition for truly learning what Bitcoin is. We've got a batch of caller radical successful this manufacture present who are going done those lessons, and hopefully folks volition larn from them. Especially successful this bull market, there's been truthful overmuch leverage added to the system. For those of america who've been astir a agelong time, we’ve learned these acquisition a agelong clip agone - You don't leverage Bitcoin.”
A regulatory propulsion for Bitcoin and stablecoins
In summation to advising that Bitcoin shouldn’t beryllium leveraged, Long mentioned that determination are caller regulations for Bitcoin coming retired of Washington D.C., thing which she believes has been coordinated with different authorities bodies. “It was Ray Dalio who said that Bitcoin's biggest menace is success, due to the fact that that means the regulators are going to beryllium cracking down,” said Long.
Although this whitethorn be, Long pointed retired that regulations volition not prohibition cryptocurrency oregon Bitcoin — arsenic agelong arsenic users comply. She said:“The punchline is that if you wage your taxes and you get regulated, and you don't instrumentality shortcuts, you're going to beryllium okay. Those that are trying to perpetrate crimes, oregon defraud consumers, oregon not wage taxes, and not comply with the law, past those radical are not going to beryllium okay.”
Long besides noted that regulations astir stablecoins are a precedence for lawmakers. In particular, this volition guarantee that stablecoins don’t infect the U.S. dollar outgo strategy with liquidity risk. To enactment this into perspective, Long mentioned the accidental hard fork that happened for a fewer hours successful Ethereum (ETH) during November of past year, saying:“At the clip I was reasoning what would hap if each the Ethereum ERC20 stablecoins had to beryllium redeemed wrong the span of minutes due to the fact that they had to beryllium burned connected 1 fork and reissued connected another? That is not a hazard that the accepted fiscal strategy has been reasoning about.”
Moreover, Long commented connected the risks associated with stablecoins backmost successful May, informing that the full stablecoin marketplace has the imaginable to bring down different tokens upon a recognition marketplace correction.