"Lever – this is a test for most bubbles in the world," a few years ago said that Murray Stahl, Chairman and CEO of Horizon Kinetics. Then it was thought that cryptocurrency will not come to that stage of development.
Now, however, "leverage", "loans", "trading on margin" are familiar elements of the cryptocurrency market inherited from the former financial system. Now increasingly appear other statements. "The demand for leverage is growing," – these are the words of Adam white, Vice-President of Coinbase and General Manager of GDAX.
The desire of the traders to enhance profitability through leverage is not the only reason why some see a need for more lending in this market.
Max Boonen, CEO B2C2 said: "Can the transaction be carried out faster? Yes. Can it be instant? Absolutely not, and should not be like that."
When discussing the size of the block of Bitcoin, he stressed that there is "a compromise between the calculation speed and stability of the payments infrastructure. The more transactions you carry out through the network, the more brittle it can become."
Dan Matuszewski, the head of the trade Department at Circle Internet Financial, also believes that there is a "strong necessity" to provide possibility of borrowing in this market. It will not only contribute to the creation of short positions, but will provide working capital for trading desks.
Speaking of Boonen B2C2 also pointed out the irony of this situation, since Bitcoin was born as a reaction to the credit crisis of 2008 and now takes over many features of the previous financial system.
"Bitcoin enthusiasts do not like loans. But for better or worse loans are an important part of a functioning and liquid financial market," he said.
"Before started to join the institutional money because of the need, the loans appeared in the system of Bitcoin and cryptocurrency markets, as the major exchanges started to offer leverage to retail investors early," Boonen.
created by:Maxim Centurion | 29 Nov 2017 10:19