Hedge Fund Says Crypto Industry…
The managing partner of crypto hedge fund Morgan Creek Digital says it makes no sense for investors to speculate in crypto assets without insurance. In a new interview on the Blockworks Macro podcast, Mark Yusko says that if the centralized finance industry is to take off, crypto assets must offer value to customers. “There has to be money, whether it’s equity, debt, or a claim on cash flow, for there to be valued. Uniswap does all that volume, but if the token doesn’t give me some of the cash flow generated by those decks, it needs to have the proper function.
He says cryptocurrencies should also have an insurance group like the Federal Deposit Insurance Corporation (FDIC) that insures deposits in US banks in the event of bankruptcy of those financial institutions.
“The other part that needs to happen is to take some of the fees and frictions of the transaction layer and create an insurance pool as the FDIC does for the banking system. There must be a lender of last resort, collateral of last resort, whatever. The hedge fund veteran says every industry in the world needs a viable and robust insurance market to thrive, and the cryptocurrency industry is no different. “You could never get a home loan if you couldn’t insure your house. You would only drive a car if you could guarantee it, but we speculate on these assets with no assurance of insurance. It simply does not make sense.