Crypto Markets Shaken, but the Future Is Bright

by Jurica Dujmovic
By Jurica Dujmovic

These last two weeks have been a wild roller coaster ride, and a good chunk of this chaos can be attributed to one individual.

Sam Bankman-Fried is a controversial figure. Love him or hate him, he’s been the hottest topic in the news lately. But whether he’s a criminal or just terrible at managing money is beside the point.

Despite the magnitude of the FTX fiasco, he’s just a small part of a much larger problem.

What problem, you ask?

This is a widespread issue that every current and potential crypto investor should be aware of: There is a shockingly low level of understanding of what cryptocurrencies are and how to use them.

This ignorance has been growing by leaps and bounds, fueled by media headlines touting “institutional adoption” that will somehow bring the golden age of crypto.

What it did, in fact, was turn crypto into yet another asset the masters of traditional finance can ruin.

The true purpose of crypto isn’t speculation and institutional adoption. Its goal is to remove the middleman so the entire system can remain decentralized, enabling transactions to flow freely and safely between empowered individuals.

No single entity is supposed to have control over the system, and individuals should have full control over all their funds.

In its early days, crypto grew and thrived precisely because users understood one key concept: If you don’t own your keys, you don’t own your crypto.

But this success attracted centralized entities that saw an opportunity in the crypto space, and they began to open centralized lending/borrowing institutions. They took advantage of users that were more accustomed to trusted TradFi platforms like Robinhood Markets (HOOD) and copied their interface for a more user-friendly experience.

But it isn’t worth giving up your financial freedom for a bit of comfort. The cost of depositing and storing your assets on these centralized platforms is sharing your private keys with them. Once your keys are surrendered, it’s possible for these institutions to manipulate your funds however they wish … and that includes locking your money up.

Centralized exchanges such as these are putting investors back at square one by forcing them to give up control of their assets and reintroducing the middleman.

This brings us back to where we are right now — inside the crater that is the FTX debacle.

However, instead of learning a valuable lesson from this incident, some individuals are choosing to view crypto as the scapegoat. They aren’t seeing the big picture and are blaming cryptocurrencies for running off with their money, when CEXes are the true culprit.

According to them, the problem will be solved by regulating all exchanges and possibly outlawing the use of decentralized finance altogether.

But the problem with regulation is that this can add even more TradFi layers to the mix, essentially turning crypto into yet another central bank digital currency under complete control of the government and central banks.

This “Empire Strikes Back”-esque saga of crypto versus TradFi won’t end until every user adapts the crypto mindset. In order to achieve the level of financial independence crypto can provide, users need to educate themselves on how to properly use this platform.

We recognize that crypto can be difficult to navigate and quite intimidating to even try out. But rest assured, you aren’t alone in your crypto journey. Our editors are here to help you every step of the way and work hard day in and day out to open your eyes to the risks as well as the benefits that come with owning, investing and trading crypto.

We’re here to ensure that you’re on course as we continue to explore the exciting world of crypto. Whether that’s with your daily updates here or in one of our products that focus on specific sectors, like Marija Matić’s Undiscovered Cryptos or Joel Kruger’s NFT Wealth Builder.

In fact, you can see all our offerings here.

With that being said, the FTX ordeal remains a harsh reminder of something that we already knew: Centralization is the one true enemy of crypto.

But it’s not an enemy that’s winning just yet. Even though the broad market seems shaken up right now, crypto remains unscathed. DeFi has kept things running … while centralized platforms have been struggling.

DeFi still offers the allure of financial independence, decentralization and transparency ... while TradFi continues to show its weaknesses. And DeFi is still growing and evolving every single day.

Those of us that understand its vast potential will remain faithful, hopeful and unshaken in HODLing and following the tenants of crypto in our financial day-to-day.

And I hope you will join us on that journey.

Best,

Jurica

About the Contributor

A MarketWatch columnist since 2014, Jurica covers science, technology, privacy, security and futurism, earning him the title of top three contributors for three consecutive years. At Weiss since 2011, he manages social media content and contributes regularly to Weiss Crypto Alert.

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