According to business leaders in the sector, self-custody is what cryptocurrencies were designed for, and bear markets are nothing new for Bitcoin and other cryptocurrencies.
Several business professionals claim that the ongoing cryptocurrency loan problem and the ensuing drop in the value of cryptocurrencies are further evidence of the significance of self-custody or “real ownership” of cryptocurrencies by the holder.
The market value of cryptocurrencies fell below $1 trillion in June, and Bitcoin’s (BTC) monthly losses were approaching their highest levels since 2011. Whether crypto lending would endure the present crypto winter is an open question. Nevertheless, a number of business leaders concur that investors can permanently preserve their funds by transferring them to self-custodial or noncustodial wallets.
According to Yves Longchamp, head of research at the Swiss crypto bank Seba, it’s critical to keep in mind that companies offering crypto financial services like Celsius or Babel are centralized finance (CeFi) platforms rather than decentralized finance (DeFi) applications.
“Based on this evidence, CeFi platforms need to be better regulated with a focus on risk management. It is difficult to regulate DeFi as you cannot put a smart contract in jail, or simply close a DeFi application,” Longchamp said in a statement
The CEO stated that one method to govern the broader crypto market is to regulate the crypto user in the first place by offering instruments for investment protection and education together with trustworthy products from a trustworthy source.
“In the spirit of blockchain, self-administration is key: crypto holders should own their coins in non-custodial wallets. If a user is to make smart decisions they need to be well-informed on the risks they are undertaking.”
Algorithmic stablecoins like TerraUSD (UST), according to Longchamp, are “unstable” and “should be avoided.” He suggested that CeFi concentrates on transparent asset-backed stablecoins.
Brian Norton, chief operating officer at MyEtherWallet, asserts that cryptocurrency investors now have access to sufficient tools to understand they do not need to rely solely on CeFi to execute transactions and manage risks.
Norton stated that people can learn how to exercise self-custody during harsh winters, and he added:
“If you are relying exclusively on centralized platforms, even when the yields are great, you’re still giving up a good deal of control over your digital assets. […] Self-custody is what crypto was built for, and what we are seeing right now is not unusual.”
Adam Lowe, chief product and innovation officer of the Arculus crypto wallet, claims that the goal of crypto self-custody is to give users complete control over their keys and the future of their cryptocurrency.
“Self-sovereignty supports balance and self-regulation, and is beneficial to the entire digital asset ecosystem,” Lowe said in a statement
