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That's true for traditional financial institutions that consider this the costs of doing business and can easily absorb such losses. Something like the $25mn Co
by this_user 13y ago
That's true for traditional financial institutions that consider this the costs of doing business and can easily absorb such losses. Something like the $25mn Coinbase got in venture capital is lunch money for a JP Morgan or Goldman Sachs. BTC on the other hand has insane amount of volatility and the players are comparatively small. You may simply find yourself in a situation were they are simply unable to refund your losses and instead declare bankruptcy.
- PeterisP 13y agoWell that's the point - if you take a short/long position in BTC, then you must afford to pay it out even in fluctuations - if you can't, pay someone to hedge/'insure' it; if you don't - declare bankruptcy and pay up whatever you have. The whole point is that 'comparatively small' players shouldn't be allowed to take up insane amounts of volatility; if you accept consumer's money then it would be reasonable to require to put that $25mm as a bond to pay out your debts, and put a ceiling on how much deal volume you're allowed to hold if you've got only tiny amounts such as $25mm.