Crypto Lending Scheme Implosions: A Benefit From The Recent Dip
There are actually many benefits to dips such as the ones we have witnessed lately and it isn’t only cheap Bitcoin. One big benefit is the recent implosion of crypto lending platforms such as Celsius; lending platforms which are centralized and the antithesis of Satoshi’s Bitcoin:
CRYPTO LENDING SCHEME IMPLOSIONS MAKE BITCOIN STRONGER
First, the Terra/Luna ponzi blew up and forced a liquidation of about 80,000 bitcoin. Then, Celsius, a centralized cryptocurrency lending platform which held cryptocurrency with a value of around $3 billion more than 1 million customers, halted paying out funds to its clients and seemed to be insolvent.
Reckless lending practices brought the whole system down. These centralized services take customers’ bitcoin and promise monthly returns. They lend it out to other DeFi projects, which is risky in the first place, and, on top of that, they lend out more money than they hold in assets. This is essentially a practice that led to the global financial crisis of 2008, which was a reason that Satoshi Nakamoto released the Bitcoin software in the first place. Now, the cryptocurrency industry is building the same over-leveraged financial products and one has to ask: Did they not learn? Did they think they found a solution to magically make profits, where there is no underlying economic activity?
Full article here: https://bitcoinmagazine.com/markets/crypto-price-dip-makes-bitcoin-stronger