Whale Garrett Jin Highlights Leverage Issues in Crypto Market

According to BlockBeats, prominent crypto investor Garrett Jin, known for his significant shift from Bitcoin to Ethereum, has raised concerns about the deeper issues within the cryptocurrency industry. Jin pointed out that trading platforms are offering high leverage on assets lacking intrinsic value to meet user demand and boost profits. This practice, he noted, was previously confined to the forex market, where underlying assets have value backing, lower volatility, and liquidity provided by banks. Jin emphasized that if trading platforms continue to offer such high leverage, they should at least establish mechanisms similar to stability funds, akin to those in the U.S. stock market, to provide liquidity support during crises. He argued that this approach is essential to rebuild trust, attract capital back into the market, and promote healthy market development. The market downturn on October 11 underscored the urgent need for liquidity support during extreme volatility. Jin believes that platforms that pioneer the establishment of stability funds will not only attract capital inflows but also drive the entire industry forward.