All eyes are on bitcoin (BTC), the biggest Cryptocurrency crosses $40,000 on June 14. Unsurprisingly, the price hike came when Tesla CEO Elon Musk tweeted that the electric-car company Will potentially accept BTC payments Miners confirm once again green energy initiative.
Yet while Musk’s tweet may have propelled the price of bitcoin, some industry experts believe that bitcoin is not a cryptocurrency that should be leveraged. For example, during an exclusive interview at Bitcoin 2021 in Miami, Caitlin Long, founder and CEO of Avanti Financial, told Cointelegraph that unlike other cryptocurrencies, solvency matters more than leverage and liquidity when it comes to bitcoin:
“Once you get into bitcoin and you start losing money, I think it’s really valuable teaching to learn what bitcoin really is. We have a lot of new people in this industry now. Those who are going through those lessons, and hopefully people will learn from them. Especially in this bull market, so much leverage has been added to the system. For those of us who have been around for a long time, we learned these lessons long ago – you Don’t take advantage of bitcoin.”
A regulatory push for bitcoin and stablecoins
In addition to advising that bitcoin should not be leveraged, Long noted that new regulations for bitcoin are coming from Washington DC, something he believes has been coordinated with other government bodies. . “It was Ray Dalio who said that the biggest threat to bitcoin is success, because it means the regulators are going to break down,” Long said.
However it may be, Long explained that as long as users comply, the rules will not ban cryptocurrency or bitcoin. He said:
“The punchline is that if you pay your taxes and you get regulated, and you don’t take shortcuts, you’ll be fine. Those who are trying to commit crimes, or defraud consumers, Or not paying taxes, and not following the law, then those people will not be fine.
Long also noted that the regulations surrounding stablecoins are a priority for lawmakers. In particular, it will ensure that stablecoins do not infect the US dollar payment system with liquidity risk. To put this in perspective, Long mentioned the incidental Ethereum hard fork for a few hours (ETH) saying during November last year:
“At the time I was wondering what would happen if all Ethereum ERC20 stablecoins were redeemed within minutes because they had to be burned on one fork and re-issued on the other? The financial system has been thinking.”
In addition, Long, commenting on the risks associated with stablecoins in May, cautioned that the entire Stablecoins Market Has the Potential to Bring Down Other Tokens On a credit market correction.