News - Charles Hoskinson: Is Wall Street becoming a threat to the crypto space

By Ted Maas

Charles Hoskinson: Is Wall Street becoming a threat to the crypto space

Cardano founder Charles Hoskinson sees centralization trends in the crypto space. Wall Street is appropriating the crypto space.

"Legacy is Eating Crypto" (The traditional financial sector is eating the crypto sector, loosely translated). This is the title of Cardano founder Charles Hoskinson's latest video. In the livestream on YouTube, Hoskinson warns against centralization in the cryptospace. He focuses on two aspects in particular: 1. the dominance of stablecoin issuers such as Tether and Circle and 2. the influence of Bitcoin spot ETF sponsors such as BlackRock and Fidelity.

The Cardano boss describes in the video that stablecoins account for up to 70 percent of the on-chain transaction volume in the cryptospace. This means that USDT and co. play a larger role than Bitcoin and Ether in terms of volume. However, exactly what Hoskinson means by on-chain transaction volume remains vague.

According to Glassnode data, Tether's transaction volume is currently about US$5.5 billion. Bitcoin, on the other hand, has a transaction volume of 1.2 million BTC, or US$61 billion, which is ten times its value.

Hoskinson, however, is more specific on another point. In the video, he discusses the risks posed by the centralized nature of stablecoins. Indeed, this poses a regulatory risk in certain jurisdictions. In doing so, he portrays algorithmic stablecoins as a solution. However, these have very different risks, as the Terra LUNA case has shown.

The ADA founder is also critical of the hype surrounding the Bitcoin ETF. He points out that sponsors own significant amounts of BTC. This does drive up prices. But it could also lead to a centralization of power in the Bitcoin space.

At the time of writing, BlackRock, Fidelity, Grayscale and Co. hold 723,000 BTC. This represents about 4 percent of the total amount of Bitcoin in circulation.

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