Don’t be mean to CEXs — Crypto relies on them
Blockchain technology will eventually establish a reliable framework for exchanging value, effectively decentralizing power and financial control. This vision represents a revolutionary paradigm shift that we should wholeheartedly embrace.
However, there are certain factors that may hinder this bright future, including the zero-sum nature of the derivatives market. Crypto needs continuous adoption and capital injection to increase in value — the psychological tendencies that tend to encourage the fear of missing out (FOMO) and excessive trading.
Money itself is not inherently valuable but rather a vessel for value. Consequently, the cryptocurrency market is a zero-sum derivatives market where individuals trade against each other based on differing expectations of the value it represents rather than the actual value itself.
A zero-sum game is a situation where any gains made by one participant come at the expense of losses for another participant. 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.
Related: Ripple verdict could spark a new bull market — Or more malaise
The zero-sum nature can create a highly competitive and speculative environment where traders are focused on short-term gains rather than the underlying value and potential of the cryptocurrencies. Consequently, this distracts from the ultimate goal of decentralization and the establishment of a robust, reliable framework for value exchange.
For a cryptocurrency to increase in value, more individuals and businesses must use and invest in that cryptocurrency. The greater the adoption and capital inflow, the
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