In a downtrend market for cryptos, the custodians are losing money on the buy side…
If that trend continues, what if BTC and PPC get close to zero with no recovery?
BTC and PPC could converge to that point.
In that case, it would be very problematic for custodians and Nu.
That is why, I think Nu needs a safety net against tat.
Using reserve is one.
But we could now really put some efforts on supporting NBT/USD more than ever.
Supporting NBT/USD does not expose custodians to buy side liquidity loss and is ultimately the pair that counts.
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Yes, I’ve raised the question months ago, but you know not many traders hold NBT for a long time, perhaps they frequently transfer between BTC and NBT, if so, the counterpart risk is partially between traders and of course our custodians will suffer when btw price plumbs.
I think the bottom of the problem is that there is much less real assets (mostly in the form of fiats) in crypto-economy than the total valuation (i,e, there is a big bubble). So if you try to catch a lot of trading with these bubble assets (e.g. making a NBT/BTC market) you will have exposure unless you only act as a match maker between buyers and sellers. Someone posted a scheme for Nu/crypto trading without exposure a few days ago. I can’t find it now.
Thanks for looking for it but no it was not this one. I seem to remember tht it was posted by one of the less frequent or relatively new posters.