Synthetic stocks have arbitrage discounts/premiums that shouldn’t exist.
Decentralized markets often cause the liquidity provider to lost value from “impermanent loss”
The capital controls thing is a fairy tale. When was the last time someone accepted a ruble in exchange for any major crypto currency? If someone can but BTC with a dollar, why don’t they just evade the control with their dollars?
Major cryptos are all down 20%+ from their peak. That’s wild inflation.
>Synthetic stocks have arbitrage discounts/premiums that shouldn’t exist.
Why is this a bad thing? It only implies that there are information inefficiencies. A discount/premium represents a oppurtunity to capture it and make money, remind me again why this is a bad thing? ADR's/GDR's are a very similar thing (well actually inferior in some respects) in traditional finance and have a tremendous product market fit.
>Major cryptos are all down 20%+ from their peak. That’s wild inflation.
Uh, you and I must have a different definition of inflation. I dont think taking price delta is a useful thing. Conversely I could argue that if you moved the point of comparison back 18 months, the dollar has markedly declined vs. crypto (which is a fact), obviously this is cherry picking, hence why price discussions arent useful.
Capital controls are not a fairy tale for a large group (see: billions) of people. Crypto has found a use case in Venezuela, China, Turkey, Lebanon and Argentina amongst others. As a point of clarification you cant evade controls with dollars in financial systems that neccessitate holding said dollars in bank accounts, with the very same banks that are controlled by regulators who enforce those capital controls, frankly that is nonsensical. If you are implying bags of USD hidden under beds is suitable, then good luck with that.
It's kind of wild to me that crypto has caused some people be to pro arbitrage. Arbitrage is the most inefficient form economic rent because it is a tax on producers of value (a group that largely gets ignored in the crypto-verse) that goes directly to speculators.
>Uh, you and I must have a different definition of inflation.
Yeah, my definition if inflation is a year over year comparison oh how much a basket of goods and services cost relative to a currency. What's yours?
>Crypto has found a use case in Venezuela, China, Turkey, Lebanon and Argentina amongst others.
Which currency and where are the transactions? Are Venezuelans buying BTC with bolivars? If so who is selling their BTC for Bolivars? Are they transacting day-to-day in a currency I'm not aware of?
>>It's kind of wild to me that crypto has caused some people be to pro arbitrage. Arbitrage is the most inefficient form economic rent because it is a tax on producers of value (a group that largely gets ignored in the crypto-verse) that goes directly to speculators.
Arbitrage is a neutral activity, I dont see any universe where it could be seen to be a tax on producers of value (whatever that means), it is simply market participants correcting informational inefficiencies and providing liquidity.
>>Yeah, my definition if inflation is a year over year comparison oh how much a basket of goods and services cost relative to a currency. What's yours?
Reread my previous response to your reply on this point, on why this is not at all useful.
>>Which currency and where are the transactions? Are Venezuelans buying BTC with bolivars? If so who is selling their BTC for Bolivars? Are they transacting day-to-day in a currency I'm not aware of?
>it is simply market participants correcting informational inefficiencies and providing liquidity.
You are describing the process of eliminating arbitrage. What synthetic stocks have is arbitrage. Is that distinction not clear to you?
>why this is not at all useful.
So a pizza slice cost 0.0002 BTC last year and now costs .0003 BTC and that's not meaningful to you? Just because someone said the word 'non-inflationary' doesn't mean Bitcoin is immune from the factors that cause inflation (supply and demand of a currency vs. supply and demand of goods and services - note that fixing currency supply is only 25% of that equation).
>the FT article
"While Turks have long chosen to protect themselves against lira volatility by keeping their savings in dollars or euros, data suggest that some of them are turning to “stablecoins”, which are pegged to hard currencies or other assets and act as a bridge between digital coins and national currencies."
So the use case of crypto is making it so Turks can hold USDC (bought with USD) instead of just holding USD? Cool.
EDIT: Just to be clear on my last point here, unless people are willing to sell their tokens for Lira, then Lira holders can't buy the tokens. If there is a large market of people willing to sell tokens for Lira, then the Lira can't be that bad of a currency or somebody is lying somewhere. Just because it's crypto doesn't mean you don't have to thinks about the two sides of the transaction - contrary to popular crypto belief, value isn't generated arbitrarily from the ether.
>Synthetic stocks have arbitrage discounts/premiums that shouldn’t exist.
So somebody is making mad money from arbitraging them?
>Decentralized markets often cause the liquidity provider to lost value from “impermanent loss”
Someone's loss is someone's gain.
>The capital controls thing is a fairy tale. When was the last time someone accepted a ruble in exchange for any major crypto currency? If someone can but BTC with a dollar, why don’t they just evade the control with their dollars?
Please try sending money from China to the outside and report back.
>Major cryptos are all down 20%+ from their peak. That’s wild inflation.
You can do other things with assets than "buy and pray".
Chinese individuals have a $50,000 USD annual limit on buying foreign exchange/or placing foreign wires. You can read up all about it on the State Administration for Foreign Exchange (SAFE) a.k.a. the Chinese capital control regulator's website e.g. https://www.safe.gov.cn/en/2017/1230/1391.html
Chinese corporations must too also observe strict limits on foreign exchange transfers (although the limits are a little higher).
Foreign investors in China have ongoing and substantial difficulty repatriating money/earnings and have previously had to rely on pools of capital known as "QFII" https://en.wikipedia.org/wiki/Qualified_Foreign_Institutiona... , things have improved somewhat in recent years, but it would only take a minor unexpected decline/appreciation in the CNYUSD or CNH/CNY spread for things to tighten back up.
When I left China, banks only let me convert 500 USD worth of RMB per day of my savings. This was money that I'd earned legally in China and already paid taxes on. I didn't realize this restriction until after I'd already bought plane tickets and was preparing to leave.
- Decentralised Money Markets (including forward rate curves), biggest analogue to this is the emergence of a nascent eurodollar market in the 50's
- Trustless Borrowing and Lending
- Evasion of sanctions and capital controls (N.B. this is not necessarily negative)
- Allow decentralised autonomous organisations (D.A.O's) to manage treasury assets (e.g. are a key part of coordination)
- Allow me to self custody my wealth outside a traditional institution and outside of inflationary govt. backed currencies