Woo says it’s going to be a bumpy ride for the altcoin market in the wake of the SEC’s regulatory action against Ripple.
Store of value buckets (very roughly):
$12 Trillion Gold
$90 Trillion Fiat
$100 Trillion Stocks
$100 Trillion Bonds
$250 Trillion Real Estate
Derivatives = $1000 Trillion+
Derivatives encapsulates the buying, selling and transmission of risk. The modern world is enabled by them.
Want insurance for your house? Do you want food that farmers will grow? How about funding for your first business? Derivatives enable the risk market to enable these activities for you. They use collateral in the form of store of value to operate.
Decentralized finance (DeFi) in its current form is an experimental area where we figure out how to build networks to buy, sell and transmit risk. For that to happen the underlying networks will need to draw value into their market caps to use as collateral.”
“In the traditional world it’s a 2:1 ratio between derivatives and store of value. That would translate to a BTC dominance of 33%. The first thing to build is store of value, that’s why BTC dominance has been so high. It’s possible it continues a downtrend towards 33%.
We’re currently in a phase of weeding out scams, ponzis and security frauds from legitimate experiments. The ride will be choppy.”
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Art Furnace