Sam Bankman-Fried’s fraud leaves lasting impact on crypto market
07/17/2024 03:04Aaron Williams shares advice on handling crypto volatility and ignoring regulatory noise for better investments.
Cryptocurrency remains a hot topic, with its volatile nature and evolving regulatory landscape often causing concern among investors. Roundtable anchor Rob Nelson, alongside Aaron Williams, Co-host of Bitcoin Bros, and Shalin Madan, Co-Founder and Chief Growth Officer at Formidium, delve into these issues, providing insights and advice for those involved the crypto world.
Nelson opened the discussion by emphasizing the distinction between Sam Bankman-Fried's fraud and the intrinsic value of cryptocurrencies. "We're just going to keep paying for the sins of Sam Bankman-Fried," Nelson remarked. He made it clear that the fraudulent activities associated with Bankman-Fried were not inherent to crypto itself. Rather, it was a case of plain fraud that happened to occur in the crypto space.
Williams echoed this sentiment advising investors to ignore the noise surrounding regulatory fears. "Regulation in the United States is still on a positive path," Williams stated, highlighting the increased legislative attention on crypto over the past five years. He reassured that bitcoin, along with other significant cryptocurrencies, would endure these regulatory challenges, regardless of short-term impacts.
Nelson then shifted the conversation to the volatility of bitcoin, noting that while it can rise and fall rapidly, institutional investors have adapted to these fluctuations. "Bitcoin isn’t going anywhere," he asserted. The real challenge lies in how retail investors perceive and react to these swings. Shalin Madan provided an institutional perspective on managing this volatility.
Madan pointed out that bitcoin is actually less volatile now compared to a few years ago, signaling its maturation as an asset. He emphasized that understanding and quantifying volatility is crucial for managing investments. "If something's very volatile, you size it smaller, but it doesn't mean that you don't have any position in your portfolio," Madan explained.
He also drew comparisons between cryptocurrencies and traditional assets, noting that despite high volatility, cryptocurrencies are measurable and can be incorporated into investment portfolios. This measurable nature makes them more predictable than illiquid assets like real estate, whose value can remain uncertain for years.