$2,000,000,000 Hedge Fund Manager Says Crypto Industry Will Take Off After This Happens

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Managing partner of crypto hedge fund Morgan Creek Digital says it doesn’t make sense for investors to speculate in crypto assets without insurance.

In a new interview on the Blockworks Macro podcast, Mark Yusko argues that crypto assets need to deliver value to customers in order for the centralized finance industry to take off.

There has to be money, either equity, debt or cash flow claims, for there to be value. A token that exists simply for people to redeem has no value. Uniswap does all that volume, but if the token itself isn’t giving me a share of the cash flow generated by those decks, then it doesn’t really have the right function.

He says the crypto should also have an insurance pool similar to the Federal Deposit Insurance Corporation (FDIC), which insures deposits in US banks in the event that those financial institutions fail.

The other thing that needs to happen, I believe, is to take some of the expense and friction from the transaction layer and create an insurance pool, similar to how the FDIC does for the banking system. There has to be a lender of last resort, a security 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 crypto industry is no different.

“You could never get a home loan if you couldn’t insure your home. You would never drive a car if you couldn’t insure it, and yet we speculate on these assets without the promise of insurance. It just doesn’t make sense.

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