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Crypto unlikely to survive as investment if unregulated, SEC chairman says

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Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#71

Post by scottLobster »

toomuchtodo wrote: post #9

It is difficult to get a crypto proponent to understand something, when their crypto wealth depends on them not understanding it. EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction)…

These same folks allow regular people to do options trading, invest in any individual stock and other forms of wild gambling all from the convenience of their phones (complete with fun animations!)

It's also rather difficult to actually recover losses in court in a civil case unless you're rich enough/the amount at stake is large enough to eat the losses in court fees/collections measures and still make a profit (winning a judgement does nothing if the losing party simply refuses to pay, at which point you have to engage the Sherrif/place liens on property/hire collections agencies/etc). Whether it should be that way or not, that's the reality. These same folks allow that system as well.

I'm more inclined to think the regulators will go the way of rich/those who make campaign contributions/those who can lobby. I wish we didn't live in that world, but we do. The evidence that we do has been unmistakable since 2008. So some of the scammier micro-cap coins might get regulated out of existence, but with Wall St taking an interest and plenty of wealthy people on board, crypto as a whole is going to stick around IMO.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#72

Post by frockington1 »

spiderice wrote: post #47
CountDrewku wrote: post #15

Isn't the entire appeal of crypto is that it's not regulated? Why the hell would I want it if it's controlled just like a fiat currency. That means it's susceptible to idiotic government decisions right? The only reason our regulatory masters every say this shit is because they want a piece of the pie for themselves. You see it in every industry where they're not getting a cut.... oh gambling very very bad! Regulate…

> That means it's susceptible to idiotic government decisions right? That's the point. I'm not sure why people think that crypto is just going to be allowed to exist outside of government control. Of course government is going to want to get their hands in it. And while the technology might be resistant to that, there are still other things the government can do, just like they do with fiat, to gain control of crypto…

It'd be hard to do in the US as its not a tax. The 5th amendment is pretty clear stating "nor shall private property be taken for public use, without just compensation.", Now that crypto is main stream the backlash would be immense and citizens have the 2nd amendment (in some states) to back it up.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#73

Post by throwvirtever »

realce wrote: post #68
notpachet wrote: post #52

Earlier quoted context omitted.

That's a rather heartless take. You could make the same argument regarding the need to protect any vulnerable members of society. Say, people who are immunocompromised during a global pandemic. Oh wait... It's never just pure mathematics. You always have a human layer on top, and that means that there is an attack surface for self-interested people to take advantage of others. The purpose of regulation is to minimize…

It's odd that people don't conceive of the health of their neighbor's investments as a support for their own. Lots of people losing lots of money in your neighborhood is bad. A good number of people winning the lottery by defrauding others is bad, they make for shitty neighbors.

Ideally cryptocurrencies will disappear on their own before lots of people have lots of money tied up in them. Regulating them makes them appear safer than they actually are.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#74

Post by thess24 »

jstx1 wrote: post #25
DamnYuppie wrote: post #13

Earlier quoted context omitted.

Can you elaborate on this further? I seem the market cap of Tether being quite tiny compared to BTC and ETH. Also Solana is nearly as large and will probably be much larger than Tether in a few months.

> Also Solana One financially questionable scheme at a time please.

Whats wrong with Solana? I don't know much about it at all, just curious

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#75

Post by sneak »

DamnYuppie wrote: post #13
sneak wrote: post #10

I think this is wrong, but once Tether implodes, it will erase a huge amount of value and the ecosystem will take years to recover.

Can you elaborate on this further? I seem the market cap of Tether being quite tiny compared to BTC and ETH. Also Solana is nearly as large and will probably be much larger than Tether in a few months.

The market cap of BTC and ETH is so high because there are so many more USDT issued than Tether has dollars.

You can't reason about Tether's relative value/ratio to BTC/ETH in a world where BTC and ETH are traded against USDT.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#76

Post by coralreef »

toomuchtodo wrote: post #9

It is difficult to get a crypto proponent to understand something, when their crypto wealth depends on them not understanding it. EDIT: If you steal my gold or other metal store of value, I can pursue you in court and recover my loss (either the actual materials lost or fiat value). If you steal my single named security, I can pursue you in court and recover my loss (or the clearinghouse will reverse the transaction)…

> If you steal my gold or other metal store of value, I can pursue you in court and recover my loss

Stolen property is stolen property. Not all stolen property is recoverable. Even stolen property with a paper trail may not be recoverable (ask Bernie Madoff fraud victims who have expensive lawyers) or may not be compensate-able. Cars, bikes, phones, etc. get stolen every day. If I meet someone to buy something for $1000 cash and they just run off with it, I've little recourse.

I'm a crypto proponent, and I'm pretty pro regulation.

The reason is because integrating current legal systems with crypto actually makes it more powerful and valuable. Existing legal frameworks can be used to link a purely digital world to the physical world; ex. for us to reliably trade tokens in physical assets (house, painting), we need courts and systems we can leverage for confidence and rule of law.

Therein lies a tradeoff and irony, by mixing such systems. You might say "just build it on a centralized system", and in an ideal world that would be great. The problem is that bureaucracy and politicization of systems make it impossible for innovation to occur: simply look at the friction facing car sharing (Uber), online betting/gambling, housing sharing (Airbnb), etc. Those things can't be the wild west, but society is clearly better off and wants those services.

I suspect some jurisdictions will be friendlier to crypto and more willing to explore those spaces. Innovation will flock there, and eventually everyone else will just follow.

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#77

Post by RivieraKid »

Crypto's price has been driven by the increase in crypto allocation in the total world investment portfolio. Right now crypto is at 2.6T, gold 11T, stocks are 122T.

The percentage of crypto in the world portfolio can't grow forever though. Once it reaches its limit, the harsh reality will very slowly start to settle in. Crypto doesn't generate any value (unlike stocks, bonds, real estate) and doesn't have any intrinsic value (unlike gold). Its value is entirely based on faith.

The best case scenario would be growth proportional to total wealth growth. But why hold something more risky and with lower returns compared to stocks?

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#79

Post by JaggerFoo »

A few trends I am seeing are:

1. Initial Exchange Offerings (IEO) are specifically excluding US participants, and sometimes Canada and China based participants.

2. The US regulations are inadequate for legitimate smaller companies that want to bootstrap, requiring time-consuming legal applications to the SEC that may not get final approval - not a trend really, but more of a reinforced reality.

It makes more sense for an entrepreneur to bootstrap a company outside the US and avoid any US touchpoints, if you want to bypass the mechanics of VC capitalization, SEC friction and address a market need that will not result in a unicorn.

Cheers

Re: Crypto unlikely to survive as investment if unregulated, SEC chairman says

#80

Post by e9 »

Nav_Panel wrote: post #27
e9 wrote: post #18

Earlier quoted context omitted.

I think unregulated in this case means crypto market in general is prone to pump and dump schemes and other market manipulation without legal repercussions

It's more interesting to me why we have a seemingly obvious belief that pump and dump schemes (which are effectively a sort of coordinated social phenomenon rather than a material movement) should be regulated. Begs the question: what is the "point" of the financial system, considered as a kind of bounded game, and why is that interesting to the state as an institution?

To play fair we need some rules to the game. You can’t punch in a face during the basketball game and once someone starts doing it all the time then most would stop playing at that point and go play another game.
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