Financial expert Jim Rogers, known for his harsh criticisms of Bitcoin, discussed the latest state of cryptocurrencies in a recent interview. The Singaporean-American investor says regulators won’t allow an altcoin industry because of the Terra LUNA collapse.
Jim Rogers: Short selling is good for any market, including altcoins, but they are not allowed
In a recent Forkast interview, Jim Rogers, a well-known financial expert, said that states will not allow stablecoins. One of the first questions of the interview was about the Terra Luna debacle. Rogers says he was unaffected by the crash, emphasizing the resemblance to the dotcom years:
I followed closely enough to know that it was a disaster for many people. Other people have apparently lost a lot of money. I didn’t have a long or short position. That’s why I neither earned nor lost money… I don’t know if you remember the birth of the Internet. Many hot feelings disappeared 20-25 years ago. They had some huge reviews but they disappeared. It will be the same. It has already happened with cryptos and more will come. As
Kriptokoin.com, at the beginning of May, Terra UST’s balancing mechanism was broken and its effect was felt in the entire altcoin market. Investors and developers have learned an important lesson from this fiasco. It turns out that the algorithmic stablecoin mechanism can be made vulnerable by short selling. On this, Rogers discusses why short selling can be good for the markets:
Shorting isn’t always a bad thing. Sometimes I can even say it’s good. If an asset is too high, someone will definitely take a short position. This will prevent the overvaluation of the price. Short positioners will take the excess in price. When it falls too much, they prevent it from falling further. That’s why short sellers always remove excess tension from the market, allowing the price to find its place.
Stablecoins may face government barrier
The prominent topics in Jim Rogers’ statements were on stablecoins. UST is a stablecoin backed by LUNA. Terra prints or sells the LUNA to stabilize the UST price. The market is critical as stablecoins have to be backed by a set reserve. Stablecoin giants like USDT or USDC maintain price constants with fiat currencies. Rogers says these reserves should be “real” and “solid”:
In my view, none of them are suitable as a trading instrument. If stablecoins are just brokering, it’s fine as long as their reserves are real and solid. However, if the currency they say they will do becomes a threat, I doubt whether most governments will allow it.
As for the issue of banning stablecoins, Rogers says the work is ongoing, but the giants won’t allow these altcoin projects:
Almost every single one in the world, including the US The government is currently working on cryptocurrency. But I don’t think the US is saying “ok”. If you want to use that money there, you can. Governments don’t think so. Not what bureaucrats think. They like power. They like control. I don’t like it but they like control. Historically, most governments are unlikely to relinquish control over money. But who cares as long as they just fight?
Cryptocurrencies are considered as the economy and currency of the future. According to Rogers, just as before, some projects will hold up and some will go out of business:
When new technologies emerge, things like this happen all the time. Investors will experience many events similar to the Terra crash from now on. We can compare it to the time when the internet was first born. Many stocks that were introduced 20-25 years ago do not exist today. It has been, and will continue to be, cryptocurrencies. I don’t know about LUNA. I haven’t done much research. What could have been done better? It will be the answer.
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