Titan, a cousin of Bitcoin, has crashed. It went from all-time high $52 to $0 within 24 hours. That has been the challenge: these cryptos are generation-advancement away from risks. Someone announces something better than Bitcoin and the coins may become worthless. With the FBI demonstrating that it can track coins and link them to exchanges or storages, a race to the replacement of Bitcoin has started. But no matter what you do, there will be exchanges and all exchanges are registered with governments before people exchange real money for digital currencies. In other words, cryptos can never be wholly anonymous because exchanges are under the control of governments! So, get real.
Get me right: the world of cryptocurrency needs the government to save it. Yes, the best thing that can happen to that subsector is regulation from the government. There is no way you can watch an “asset” crash 100% within 24 hours, and yet pretend that nothing happened.
A cryptocurrency token called TITAN collapsed on Wednesday, going from about $60 apiece to near zero in a matter of hours. The sales frenzy, attributed to a sell-off driven by whales – people who hold large amounts of a cryptocurrency in this context – also destabilized a so-called stablecoin known as IRON.
A stablecoin is pegged to a reserve asset like the dollar, the idea being there’s less volatility when investors know they can redeem their fanciful crypto credits for paper depicting dead presidents or some other thing likely to retain value.
IRON, however, proved to be anything but stable because it is only partially collateralized (about 75 per cent) by the US dollar. The remainder of its value came from TITAN tokens, and when the TITAN price collapsed, IRON took a hit too. Among those caught up in the crypto run was tech moneybags Mark Cuban.
Cryptos need governments to save them. They can draft a regulation and beg governments to make laws because it is evident that self-regulation of money mints demons! And I am happy one of the crusaders agree:
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Popular billionaire investor, Mark Cuban who is a huge supporter of the cryptocurrency market, specifically Decentralized Finance (DeFi), has called for decentralized finance (DeFi) and stablecoin regulation after losing money on his investment in Titan token which crashed from an all-time high of 52$ to $0. Although the cryptocurrency market is used to significant levels of volatility, this massive crash of 100% is pretty rare, especially in such short a time.
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The token crashed because it had become overpriced and people began to sell, thereby triggering a high amount of volatility, overwhelming arbitrage opportunities and causing everyone to run to the door. Many comments on social media seem to believe that Mark Cuban had a hand in the downfall of the token.
Bloomberg reached out to Mark Cuban, he provided this response:
“I read about it. Decided to try it. Got out. Then got back in when the TVL start to rise back up as a percentage of my crypto portfolio it was small. But it was enough that I wasn’t happy about it. But in a larger context it is no different than the risks I take [in] angel investing. In any new industry, there are risks I take on with the goal of not just trying to make money but also to learn.
Even though I got rugged on this, it’s really on me for being lazy. The thing about de fi plays like this is that it’s all about revenue and math and I was too lazy to do the math to determine what the key metrics were. The investment wasn’t so big that I felt the need to have to dot every I and cross every T. I took a flyer and lost. But if you are looking for a lesson learned, the real question is the regulatory one. There will be a lot of players trying to establish stable coins on every new l1 and L2. It can be a very lucrative fee and arb business for the winners.
There should be regulation to define what a stable coin is and what collateralization is acceptable. Should we require $1 in us currency for every dollar or define acceptable collateralization options, like us treasuries or? To be able to call itself a stable coin? Where collateralization is not 1 to 1, should the math of the risks have to be clearly defined for all users and approved before release? Probably given stable coins most likely need to get to hundreds of millions or more in value in order to be useful, they should have to register.”
Meanwhile, some countries like South Korea are delisting shady cryptos in their exchanges: “South Korean cryptocurrency exchanges such as Upbit have, this week, moved to delist or warn against specific digital assets they have judged to be “high-risk” for investors.”
Countries all over the world are doing their best to protect citizens from the downsides of cryptocurrencies and South Korea is leading the charge by taking regulations of the industry to another level. […]
This new directive has been brought about by the increased level of regulatory requirements by financial regulators into cryptocurrency service providers’ operations. Last week, Korea’s Financial Intelligence Unit (FIU), which is tasked with oversight of the cryptocurrency market, reportedly reached out to no fewer than 33 crypto trading platforms that operate in the country insisting that the regulator will be conducting field consultations before September 24th, 2021
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