In Conversation With

Why the DeFi market is extremely frothy with Nic Carter

Featuring

Host

Hard Assets, Exchange Infrastructure, DeFi and More

Nic Carter, co-founder of Coin Metrics, commented on the monetary policy of global central banks and how the stage is set for bitcoin, even though BTC didn’t need a catalyst.

(10:21) “It certainly looks like we’re in for a pretty rocky decade from a monetary perspective, so things couldn’t be better for hard assets like gold and bitcoin.”

He also remarked on the limitations of cryptocurrency exchange infrastructure.

(14:09) “The bitcoin market is fairly informationally efficient, which means that it incorporates new information into the price in a fairly rapid manner. There are constraints to that efficiency and one of them is the market’s ability to absorb capital in a timely manner. And the exchange infrastructure is one of those constraints for sure. There is still a lot of regulatory uncertainty in the US as to how exchanges should be regulated, there’s no federal regulator for exchanges. And all of these exchanges for the most part are regulated by the states and a patchwork of different regimes. Most of the real liquidity is offshore, which complicates the matter…I would expect a lot more consolidation. I would expect a lot of these exchanges to get out of the business of custody and outsource that custody to third parties, BitGo, Fidelity Digital Assets, those are some of the emerging big custodians.”

Coin Metrics isn’t that involved in De-Fi but he pays attention to it. Carter issued the following waring:

(19:23) “In the last couple of weeks, it’s become extremely frothy. I think that’s evident to anybody on the sidelines. There’s a lot of projects which have pretty extractive models, some which are effectively Ponzi’s unfortunately that have yet to wind down. And I think we’re going to see the moment the enthusiasm for DeFi lapses, some of these higher profile and more marginal projects will wind down. There’s a lot of leverage built up in the system. And a lot of these systems are built on positive feedback loops, which work great when things are on the way up and then are extremely bad on the way down.”

Share the love ❤️
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

All of the content published on this site is strictly for informational and educational purposes and neither does it constitute investment advice nor solicitation to buy or sell blockchain-based tokens or securities. No investments whatsoever should, therefore, be made based upon information provided or discussed by any guests or hosts appearing within this video or audio content.

Any appearance by any company or individual does not infer any kind of endorsement by Scrumline Ltd (trading as Coinscrum) of either their products and/or services or in any related investment opportunity that they may be pursuing from time to time.

Crypto-tokens and equity investments are high risk in nature and you should always take the advice of a professional financial advisor from within the jurisdiction in which you reside before making any investment decisions.

About Author
About Author
OUR
Sponsors
cortex-logo
Dynamic Crypto Data, Essential Analysis
7 Day Giveaway: Unlimited Streaming Crypto Data for 12 Months