It's dangerous to believe that an investor who is great in one area qualifies as competent in another. Meet Kevin is a great Youtube channel if you want to buy a house. He is a dangerous channel if you are invested in crypto.
He recently came out with a video "The Coming Inflation Crisis. Do This." (https://www.youtube.com/watch?v=25zweo8b7Tc) in which he detailed investment plans for the next few months in response to what he believes will occur in this Fed based market. I'm inclined to take his advice on real estate and stocks. He even got the trajectory right on bitcoin — we're going to see a pump to around $100k topping off in May or so, then a leveling off during the summer. By the way, Fed inflation is not the only reason this will happen.
What he got wrong, however, is a dangerous thing that he and many other crypto noobs believe. And it's hard to see how he hasn't caught this in his own analysis. The troubling quote begins at 17:59:
...and this is, of course, barring any massive debt crisis that ends up coming out of a re-hypothecation crisis in the crypto lending market, because of a lack of governance [editor's note: voice tonality rises because of a lack of understanding] and uh, we don't know where all these loans are going and how often loans are being made, so, there could potentially be a debt crisis in cryptocurrency which would just be very bad for cryptocurrency all around...
No, no, and no.
And the fact this is coming from someone who so often criticizes, quite correctly, the "governance" of traditional finance — even in the video in question — that part is beyond me. But let's not even go there. The fact is that Kevin is horribly uneducated on the nature of governance in crypto. It's a new type of governance that may simply be beyond his paradigm at this point, but it's dangerous for him to present himself as someone who can speak on these things without knowing anything. He's going to get people rekt. And if any of you want to send this to Meet Kevin so he'll actually learn about crypto before he speaks on it, that would be great.
First off, we DO know where all these loans are going except in the case of these highly centralized and "regulated" platforms like Gemini, Celsius and Blockfi. Disturbingly, because of the money these shady entities have to buy affiliates like Meet Kevin, those are the platforms that noobs consider the safest. When as a matter of fact, your funds are safer in some defi protocols where you can also get a higher interest rate.
But there are controls, even on those platforms. Let's say Gemini re-hypothecates, the market takes a fall and there's a run on funds. They'll just do what they always do — put a stop on withdrawals. This is nothing new, centralized exchanges have this power, and they use it often. No different from any bank.
In the defi space, the market, ruled by code, stops re-hypothecation from moving into unsustainable crisis levels precisely because there is no meddling with the code. If your funds fall below a certain level, you get liquidated. It's immediate and immutable, giving the crypto market a practically instant response to the overindulgences of human speculation. This, Kevin, is governance, not the traditional oversight you imply is needed to avoid a crisis situation. You'll note that the crypto market went through the same deleveraging in March 2020 that the stock market did. However, stocks needed a year-long Fed bailout to recover. Crypto did not have that protection, but it recovered more quickly than the traditional market.
There are those who would say that crypto only recovered because of bailout funds moving into crypto. Were crypto unsustainable, those funds would have stopped at stocks and real estate. But people kept moving out on the yield curve precisely because crypto proved its superior governance structure.
We see the marriage of these two types of governance played out in the "scam wicks" that occur every damn time bitcoin retests its all time high. Every week there are stories of billions of leveraged longs or shorts getting liquidated because the crypto market, which can be easily researched because of its transparent blockchain, instantly responds to retards trying to take out too many loans for profit.
In every case, not just a few, that deleveraging is bought up in minutes. So the "pain" that traditional governance is trying to avoid occurs very quickly, and new market participants fill in the holes very quickly. This is exactly the outcome the Fed and US want but can't get because its governance is flawed. Yet THIS is the governance Kevin implies should be present overseeing our far more elegant and balanced market.
What's the point?
Crypto has stronger governance than traditional markets. We've already been through the "rehypothecation crisis" Kevin talks about. We go through it every week, and it corrects itself through code EVERY WEEK. Saying there is a lack of governance in crypto shows a lack of understanding and a far-too close relationship to centralized governance that we've all been conditioned to accept as some sort of edict from God. This is the way that societies are set up because they've always been that way and if we don't have that, then that society is unsophisticated until it gets it. WRONG ON SO MANY COUNTS.
And we definitely don't need the oversight of failed overseers. That should go without saying.
Somebody tell Meet Kevin to actually participate in the governance of one of the many projects that are outpacing the Fed in monetary policy before he goes off talking about governance and what we need in crypto and don't need. There will be no hypothecation crisis; if it does occur, it will occur in regulated, "plugged in" entities like Gemini and Blockfi. Their crisis will occur because of their proximity to traditional regulation and attempts to subvert the advancements of crypto governance through that proximity, not because of any inherent flaw in crypto governance. No matter what, defi will be fine after a short dump from stupid noobs.
Bottom line, Kevin, the study of crypto is the study of governance. Every successful project in crypto is like a mini-Fed with its own monetary and fiscal policy. What we see is many of them working better than the Fed, and more importantly, giving all of us a CHOICE about the type of government we want to participate in. Because if we don't like one, we can, with just a few mouse clicks, move into another. Or start our own and gather support for it from people around the world.
Kevin, do not ruin this great advancement in governance through your ignorance. Learn what crypto is really about before you speak on governance again.
Side point — and we also don't need regulation from traditional law enforcement when hacks occur. Before you try to bring some stupid argument about some hacker running off with $100 million, try researching the latest hacks where funds were frozen and money returned. I'VE BEEN INVESTED IN SOME OF THOSE PROTOCOLS THAT GOT HACKED AND WAS MADE WHOLE. AND WE DIDN'T NEED THE SEC OR CFTC OR THE FBI OR THE ABC EASY AS 123 CREW TO COME IN AND DO ANYTHING. STUDY WTF "CODE IS LAW" MEANS and just how POWERFUL this is.
I don't usually promote my articles like this, but I'm asking everyone reading: Repost this article to Meet Kevin's social media so he reads it. His take on governance in crypto is very, very wrong, and we need to get the word out about what this shit really is. Bitcoin is a NEW WAY OF GOING ABOUT LIFE, not just a silly little FUCKING store of fucking value. And tell Andrei Jikh and Graham Stephan to shut the FUCK up about risk in crypto until they learn about governance as well. You guys are good at real estate. Stick to that and shut the FUCK up about my market until you LEARN about it!
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