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Managing partner of crypto hedge fund Morgan Creek Digital says it makes no sense for investors to speculate in crypto without insurance.
In a new interview on the Blockworks Macro podcast, Mark Yusko says crypto assets need to deliver value to customers if the centralized finance industry is to take off.
“For value to exist there must be either equity, debt or a claim to cash flow. Tokens that simply exist for people to exchange have no value. Uniswap handles this much But if the token itself doesn’t give me a portion of the cash flow generated by these decks, it doesn’t really have the proper function.”
He said cryptocurrencies also need insurance pools similar to the Federal Deposit Insurance Corporation (FDIC), insuring deposits with U.S. banks should those financial institutions fail.
“The other factor we need is to take some of the transaction layer fees and friction and create an insurance pool, much like the FDIC is doing for the banking system. Whatever it is, there has to be a lender of last resort, a security of last resort.”
A hedge fund veteran says all industries in the world need viable and robust insurance markets to thrive, and the crypto industry is no exception.
“You can’t get a mortgage if your house isn’t insured. If you can’t get insurance, you’ll never drive, but you’re guessing about these assets without insurance promises.” It just doesn’t make sense.”
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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should exercise caution before making risky investments in Bitcoin, cryptocurrencies or digital assets. Please note that your money transfers and transactions are made at your own risk and you are responsible for any losses you may incur. The Daily Hodl does not endorse the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. The Daily Hodl participates in affiliate marketing.
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