Key facts:
Melker believes that “only the strong survive” and the current crisis is proof of this.
For the analyst, it is necessary to stop practices that have become common with cryptocurrencies.
The downtrend and current crisis in the cryptocurrency market has been harsh on traders and investors of all kinds. But from this negative situation there will be lessons to learn, according to the perception of Scott Melker, one of the most renowned analysts in the market today.
Before the eyes of Melker, also known as The Wolf of All Streetsthere is something “inevitable” in the cryptocurrency market, full of experimentation and new things: that “most of the tokens that are created will fail in the long run”. What he didn’t expect was that the platforms would too.
The analyst referred in his most recent bulletin, published the morning of this Tuesday, July 5, to how collateralized lending platforms with yield and leverage offers have been suffering during this bear market. Especially with examples like Celsius or BlockFi.
Melker alleged that many of these companies, which present themselves as decentralized finance protocol, they are really nothing more than companies with centralized control of their operations rather in the style of centralized finance (CeFi).
The analyst himself commented that he had been affected by this spiral of negative returns and companies risking their users’ money. However, he concluded that the great lesson of what is happening is the maxim that “only the strong survive”.
In particular, Melker considered that the current situation of the cryptocurrency market leaves as lessons to learn topics such as stop high leverage, offering high yields for collateral and risky lending.
If we learn this lesson, we move on. If we forget it, we repeat it. The strong will survive. They always do it.
Scott Melker, market analyst focused on cryptocurrencies.