What keeps you from seeing the risk?
Whether the Terra/Luna incident is a crime will be revealed through an investigation, and the part that I pay attention to in Nawabari is the “failure of risk management.” And I would like to talk about a point to pay attention behind the voices of those who criticize and ridicule Luna & Kwon Do-hyung, CEO of those who have nothing to do with cryptocurrency investment.
In the cryptocurrency community, investors (CEO Hashid Kim Seo-joon, Galaxy Digital Novogratz, etc.) who were enthusiastic about Luna coexisted with people who were worried, saying, “There’s a problem with this?” and “It’s going to explode if you do it wrong.”
CEO V.C. is an early investment participant in Terra/Luna, and the valuation gain or loss of 2 billion won reached 4 trillion won, so it is easy to guess that CEO Kwon Do-hyung’s valuation gain or loss was also in trillions.
Under the premise that there was no intention of fraud in the first place- If my business/project would grow to 50 trillion won in three years and my assets would reach trillions of won, I don’t know if I can be free from pride such as ‘I am God!’ If my assets become trillions thanks to my investment earlier than others, let alone creating an ecosystem, I will be confident that ‘my judgment and choice were right’.
So it’s natural that people around me say, ‘Hey, isn’t this too expensive?’ and ‘I think this has a flaw,’ mocking it as “Yes, your Amy,” or “… It’s because you don’t know well,” and “Do you have a stomachache because you can’t buy it when it’s cheap?”
While no one could have predicted that interest rates would be so low by 2021, if you look around, you often see a lot of people who have bought apartments early and earned hundreds of millions or billions of dollars at the most. If you give an opinion such as, ‘Hey, isn’t this too expensive for GDP, income, PEER’ or ‘too risky with excessive leverage?’ there are often derided comments such as, ‘Ha, it’s because you don’t know well.. What did you do without buying a house, X-shin?’
People who earned at most hundreds of millions of dollars from real estate are like this, but were the hearts of people who earned in trillion won?
After all, whether it was a stock dispute or a real estate enthusiast – “If you ignore the opinion of risk-taking because you are intoxicated with huge financial success, that can happen,” I think that’s a lesson that all asset market participants should learn. Banks/large companies have much stronger risk control than relatively small secondary financial institutions/small and medium-sized companies, and the larger the scale, the higher the risk management should be.
If you’re flattered by a good investment, you’re going to have to think about Kwon Do-hyung, and you’re going to say, “Is my profit going to exceed that of Kwon Do-hyung before Terra collapsed…”
unwavering principle, high risk high return
The Luna crisis is a total crisis, but it’s a pity that it hasn’t changed since four years ago, seeing a lot of “I knew it” jokes as it enters the downward market. As it has been revealed, personal investment in cryptocurrency is SHORT when the U.S. goes for interest rate cuts and LONG- rate hikes. Close acquaintances know how much SHORT I have been hitting on altcoins in Binance.
It is not a narrow view that it is simply an asset that competes with USD for scarcity. As I have been to banks and experienced the bond market, I have high expectations that there will be more and more uses of it. However, the problem is that the speed is still slow to meet public expectations. In the meantime, if interest rates are lowered, expectations will amplify, and if interest rates are raised, expectations will collapse.
Different experts may have different opinions, but the technical position of cryptocurrency is similar to the Internet in the early and mid-1990s, and Ethereum is at the level of Netscape in the early days. It’s really a good thing to see what’s happening since the establishment of the U.S. stock exchange in the 1700s, which was covered in Shuka World’s “The Age of Outlaw” (pictured) on May 17, 2022.
Robbery taking over real stocks is common, buying judges and issuing stocks indefinitely, etc..
From the perspective of modern people, it’s worth thinking, “Why invest in stocks when it’s so dangerous?” Nevertheless, isn’t investing in stocks simply explained by “human desire to get my money back at a high rate of return”?
It seems similar to the question, “Why are you investing in such a dangerous cryptocurrency?”
According to a Facebook post by Dongguk University professor Sunyoung Park on May 16, the period from 1837 to 1863 during the U.S. banking history is called free bankingera. During this period, banks were able to issue bank notes as much as collateral and distribute them like money (very similar to the current situation in which stablecoin issuers are rampant in the cryptocurrency ecosystem), and there were constant bank runs until the introduction of deposit insurance in 1934. After all, when the government’s control of public power was insufficient, banks and stocks were too dangerous.
If so, it comes down to the discussion that the control of the public authority should be increased to protect investors in the cryptocurrency market, and the point of attack that always appears in this case is the concept of “decentralization.” Just as the left and the right are not dichotomy, decentralization and centralization also span various spectrums, not dichotomy, and those who are negative about cryptocurrency tend to drive the meaning of “decentralization” too much only as “anti-government.”
The government should, of course, ban bitcoin if it is interpreted as “made to overthrow the currency printed by the government”. However, many advanced countries that list bitcoin ETFs, including the United States, do not seem to have such a narrow interpretation.
The spirit of Heungseon Daewongun that differentiates itself from white people in developed countries?
According to a YouTuber’s explanation about the birth of a microwave oven-
During World War II, terrible things happened to the bodies of the people working on radar stations, and the brothers from the Heavenly Kingdom said, “Oh, my God, this is going to be a good thing if you use it well.” And the result is that a microwave oven was created. Maybe our sentiment was, “Hey, get rid of this dangerous thing now!” But the basic sentiment of the American people was, “Even though it’s dangerous, it’s going to be beneficial if it’s used well, right? Proceed!”
Having worked with Bitcoin for only six years, which is its 13th year this year, I’m tired of the repertoire of “It’s a scam,” “It’s useless,” and “The U.S. will ban it,” which is repeated like a parrot every time the price falls, and the price can become like Luna in the wake of something, but the U.S. stance seems to be increasingly clear that “Let’s make good use of it and take the lead in this market.”
Bitcoin began to gain popularity in the 2014 Silk Road incident in the United States (the dark web that sold drugs for bitcoin). The only use of bitcoin in the drug-loathing United States is the drug trade. At that time, the market capitalization of bitcoin was not very small, and very few people held and traded it, so if you were going to ban it, that was the best timing.
However, despite the terrible incident, research and regulation are being carried out in parallel in the United States without any prohibition on the establishment and mining of various cryptocurrency exchanges. Rather, it is continuing to do the opposite of the ban, such as listing on the Chicago Mercantile Exchange, approving futures ETF, listing on Coinbase Nasdaq, and approving stablecoin by the U.S. Monetary Authority. (Many talk about stablecoin has been recognized as an official payment method by the U.S. Monetary Authority, and banks in the U.S. have approved the issuance of stablecoin directly.)
Not only the U.S., but also Switzerland and Singapore, where civil servants are high, are making active efforts to dominate this market. Of course, if the sentiment of the majority of Koreans is that they should buy all of these and ban them, it would be useless to simply listen to the cases of the U.S., Switzerland and Singapore without any effort to communicate. Conversely, before ‘anything against alliance’, it seems necessary to remember what the U.S. and other advanced countries have seen and actively embrace them.