Don't Be Mean To CEX - Crypto Counts On Them

Centralized crypto exchanges still have a crucial role to play in bridging traditional finance and decentralized cryptocurrencies.

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Blockchain technology will eventually establish a trusted framework for the exchange of value, effectively decentralizing power and financial control. This vision represents a revolutionary paradigm shift that we should wholeheartedly embrace.

There are, however, factors that can hinder this bright future, including the zero-sum nature of the derivatives market. Crypto needs continued adoption and capital injection to increase its value – the psychological tendencies that tend to encourage fear of missing out (FOMO) and over-trading.

Money itself has no intrinsic value, but rather a carrier of value. Therefore, the cryptocurrency market is a zero-sum derivatives market where individuals trade against each other based on different expectations of the value it represents rather than the actual value itself. .

Zero-sum nature of the derivatives market

A zero-sum game is a situation where any gain made by one participant comes at the expense of another participant's loss. In derivatives markets, options and futures are considered zero-sum because the contracts represent agreements between two parties, and if one trader loses, the wealth is transferred to another trader.

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The zero-sum nature can create a highly competitive and speculative environment in which traders focus on short-term gains rather than the underlying value and potential of cryptocurrencies. Therefore, it distracts from the ultimate goal of decentralization and establishing a solid and reliable framework for the exchange of value.

Need for adoption and capital injection

For a cryptocurrency to increase in value, more individuals and businesses need to use and invest in that cryptocurrency. The greater the adoption and capital inflow, the more stable and valuable the cryptocurrency can become. ...