Crypto DeFined Recap: Cory Klippsten on the Crypto Meltdown
By Kathy Chu, TruthDAO
Cory Klippsten's prescient warnings about the meltdowns of the stablecoin terraUSD and DeFi lender Celsius Network have brought him ample attention.
While he’s not “crypto ponzi PI,” as he puts it, Klippsten, as chief executive of savings app Swan Bitcoin, knows his way around the bitcoin world. Klippsten paid attention to TerraUSD and its sister currency, Luna, when the currencies' founder Do Kwon began amassing a reserve of bitcoin to stabilize any sell-off. Celsius Network, meanwhile, caught his attention in part due to its exposure to Terra-Luna.
During a June 30th interview on TruthDAO's "Crypto DeFined,"available on Fireside, Klippsten spoke about the risky bets made by the centralized finance, or CeFi, lending industry, and why he believes self custody of bitcoin is safest.
Klippsten’s top 5 quotes (edited for clarity):
CeFi Lenders Operated As Hedge Fund. "My beef with all the (centralized finance) lenders … these are not high yield savings accounts. You are signing up as an unsecured depositor. They were taking directional risks and essentially operating as a (proprietary) trading desk or hedge fund.”
He’s an advocate of bitcoins, not other coins. The crypto market has “variations on the same thing — pump and dump dynamics … self referencing leverage and just sort of gambling and trading in a crypto casino. The only thing that actually deserves a monetary premium is bitcoin.”
Klippsten believes self custody of bitcoins is best. “My personal opinion is that your coins are safe at the biggest and best exchanges. Nevertheless, the main value (proposition) for bitcoin in general is … knowing that no capricious judgement or executive order … could just block your access to your coins on any centralized third-party (platform).”
Tough times for bitcoin miners. "There was just a lot of over investment, a lot of contracts signed with mining that could only be profitable in a favorable price environment. It’s definitely tough times for the miners that weren’t ready to weather the storm.”
'Astronomical' Wash Trading in Crypto. "There’s astronomical volumes of wash trading in bitcoin and in crypto. That’s a fact. I could see why the SEC would be uncomfortable with that" when the agency decided in late June not to approve a spot bitcoin exchange-traded fund.
Watch the replay of the interview here.