‘Bitcoin isn’t an asset that’s designed to be leveraged’ says Caitlin Lengthy

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All eyes are on Bitcoin (BTC), as the most important cryptocurrency shot up previous $40,000 on June 14. Unsurprisingly, the worth enhance occurred shortly after Tesla CEO Elon Musk tweeted that the electric-car firm would probably settle for BTC funds as soon as extra miners affirm inexperienced vitality initiatives. But whereas Musk’s tweet could have pushed the worth of Bitcoin up, some business consultants imagine that Bitcoin isn’t a cryptocurrency that ought to be leveraged. For instance, throughout an unique interview at Bitcoin 2021 in Miami, Caitlin Lengthy, founder and CEO of Avanti Monetary, informed Cointelegraph that not like different cryptocurrencies, solvency issues greater than leverage and liquidity on the subject of Bitcoin:“When you get into Bitcoin and also you begin shedding cash, I contemplate that to be actually helpful tuition for actually studying what Bitcoin is. We have a number of new folks on this business now who’re going by these classes, and hopefully people will study from them. Particularly on this bull market, there’s been a lot leverage added to the system. For these of us who’ve been round a very long time, we’ve discovered these lesson a very long time in the past – You do not leverage Bitcoin.”A regulatory push for Bitcoin and stablecoinsIn addition to advising that Bitcoin shouldn’t be leveraged, Lengthy talked about that there are new laws for Bitcoin popping out of Washington D.C., one thing which she believes has been coordinated with different authorities our bodies. “It was Ray Dalio who stated that Bitcoin’s largest risk is success, as a result of which means the regulators are going to be cracking down,” stated Lengthy. Though this can be, Lengthy identified that laws won’t ban cryptocurrency or Bitcoin — so long as customers comply. She stated:“The punchline is that should you pay your taxes and also you get regulated, and you do not take shortcuts, you are going to be okay. These which might be making an attempt to commit crimes, or defraud shoppers, or not pay taxes, and never adjust to the legislation, then these persons are not going to be okay.”Lengthy additionally famous that laws round stablecoins are a precedence for lawmakers. Particularly, this can make sure that stablecoins don’t infect the U.S. greenback fee system with liquidity danger. To place this into perspective, Lengthy talked about the unintended laborious fork that occurred for a number of hours in Ethereum (ETH) throughout November of final yr, saying:“On the time I used to be considering what would occur if all of the Ethereum ERC20 stablecoins needed to be redeemed throughout the span of minutes as a result of they needed to be burned on one fork and reissued on one other? That’s not a danger that the standard monetary system has been enthusiastic about.”Furthermore, Lengthy commented on the dangers related to stablecoins again in Could, warning that the complete stablecoin market has the potential to convey down different tokens upon a credit score market correction.

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