No. of Recommendations: 4
I have struggled over what to write here.
Bitcoin almost fell below $60K USD today, almost down 50% from October of last year.
I've been publicly of the opinion that the correct prices is approximately zero dollars - I'm still bitter TMF deleted the old discussion boards. Bitcoin's value is mostly a function of utility of some people's desire to be independent and anonymous, and that is real, nontrivial value. But it is a terrible system, and was designed for failure from the start.
I would not be surprised if the action today were related to precious metal prices last week. I wonder if any stablecoins were exposed, and I wonder what would happen if a stablecoin collapsed. I also wonder if this has any relation to the recent PYPL developments.
This community skews older so I am afraid not enough members are versed on things like DeFi (decentralized finance) platforms, DeFi Exchanges (DEXs), CeFi (centralized finance) platforms, and such. A lot of money there has been created from nothing with little to no regulation, with very fast and hard to predict agentic participants.
Consider a large bitcoin-like cryptocurrency backed by real world assets - purchased through brokerage like sites - in an effort to maintain a nationless-less currency that is pegged to real currency. Instead of cumbersome taxes or laws, these are programmed into the underlying blockchain as smart contracts. It would look a bit like a money market fund. That is reasonably close to a stablecoin. Right now, there are companies offering very high yields (10% and higher) on these stablecoins/currencies. It would be smart to ask how they are paying those yields, and how those stablecoins can safely handle the rapid inflow or outflow of "fiat" currency. Now imagine many of these systems operating mostly independent of each other.
There are some very smart people here, and I would be interested if anyone has dug into the dynamics of defi platforms. Nothing is free and I haven't quite figured out how these large APR yields are being generated and how long they are sustainable.
