Why are Wall Streeters more bullish on DeFi than Bitcoin?

Investors understand DeFi because it is very similar to other products they have seen in this space.

Why are Wall Streeters more bullish on DeFi than Bitcoin?

Many financial advisors believe that DeFi is a more attractive option for Wall Streeters than Bitcoin. Venture capitalists believe the options in the DeFi space can be equated to stocks, bonds, high liquidity and short-term gains compared to something as complex as blockchain technology, bitcoin mining and pledging.

In a recent podcast with Bankless, jim Bianco, president of Bianco Research, reiterated the same sentiment.

The biggest and best thing to happen to Bitcoin is DeFi,” Bianco argued, adding that he sees DeFi and Bitcoin as two sides of the same coin.

Investors understand DeFi because it’s very similar to other products they’ve seen in this space,” he says. I can predict that at some point in the future, the company’s capital structure will be more than just stocks and bonds; there will be pass-throughs thrown in.”

In that sense, jim Bianco isn’t entirely wrong; many top companies are currently adding bitcoin and other crypto assets to their balance sheets.

Data from crypto asset managers also proves that more and more investment advisors and investors are focusing on the crypto space in general and portfolio diversification in particular.

Bianco went on to talk about the inefficiencies of the traditional financial system and how venture capitalists will exploit them, as has happened repeatedly with mergers and acquisitions on Wall Street in the US. But the rise of DeFi could change all of what he said by giving power back to the average user.

M&A and venture capital firms will come in and buy these companies because they think they can unlock value because of the inefficiencies of the current market system,” he argues. The people buying these companies are privately owned, and amateurs can’t invest in these private equity companies because they haven’t become accredited investors or advisors. But by splitting the company’s assets into pass-throughs, anyone can start to focus on that value, presenting more possibilities for other companies and investors.”

A simple understanding of what he means is that if large companies with cheap consumer goods traded their stock for passes, while offering incentives to buy such passes, they would help themselves as much as they would help consumers. Consumers don’t need a lot of money to buy these passes, and every time the value of the company goes up, the value of the passes they hold also goes up.

In this way, small investors can move away from the current equity system, which favors investors who already have a lot of money to allocate to their portfolios.

However, for such a change in investor sentiment to occur, non-government investment institutions would have to redouble their efforts. According to Bianco, DeFi needs a strict definition of pass-throughs if it wants to get out of the ring.

He argues, “If we can define pass-throughs and open up all the existing use cases for pass-throughs, we could see a lot of forward-thinking Wall Streeters get on board.”

According to Defi Llama, DeFi currently has a total market cap of $98.68 billion, which is a substantial number when compared to the global crypto market cap of over $1.5 trillion.

DeFi was valued at more than $142 billion at its all-time high, but a larger market correction has slowed its growth. the DeFi boom came late last year, and according to some industry participants the boom is set to continue.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-are-wall-streeters-more-bullish-on-defi-than-bitcoin/
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