According to an ex-Messari executive and analyst in the space, there are three companies that, "If something catastrophic happened to them today, would cause a tsunami in crypto markets."
Tether: reserve currency of crypto - Genesis: primary venue of liquidity for crypto loans.
Due to the nascency of crypto and blockchain, many Wall Street banks are hesitant to serve companies, especially if they actively deal with Bitcoin.
The systemic risk in Silvergate's theoretical collapse is that a majority of the most recognizable crypto firms may be unable to operate with banking services, especially when it may be hard to get services through other banks.
"The JPM announcement that they will provide banking services to Coinbase and Gemini isrecognition that the future will include crypto currencies, digital assets, and blockchain based systems."
Funnily enough, it's somewhat of the same for the crypto market.
USDT's importance is derived from the crypto asset being pegged to the U.S. dollar by reserves.
No one really knows what would happen if Tether, but USDT disappearing would mean the loss of the most important asset in crypto.
By offering crypto loans, the company serves market-makers, speculators/traders, and firms that need money to expand or need capital for other uses.
Its theoretical collapse would decrease the availability of capital to the aforementioned groups of firms.
If any of these 3 crypto firms collapse, a "tsunami" will ensue: analyst
Published on Jun 30, 2020
by Cryptoslate | Published on Coinage
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