A prominent Bitcoin whale who’s known for posting provocative tweets and placing large bets on Bitfinex says retail investors are buying into the hype of a new movement in the crypto space.
The pseudonymous trader named Joe007 says he believes decentralized finance (DeFi), an emerging ecosystem that offers various financial products by leveraging the blockchain technology, is the latest version of a Ponzi scheme.
“I have yet to see a DeFi which isn’t in fact a CePo – centralized Ponzi/HYIP scheme that uses random ‘crypto’ trappings to lure in dumb money into the same old musical chairs game. I mean, ‘liquidity farming’ sounds so much more modern than ‘discounted postal coupons,’ right?”
The Bitcoin maximalist says altcoins rise solely based on their ability to generate FOMO, which ultimately creates concentrated riches for a few “peddlers” and big losses for everyone else. He says traders should realize that all crypto assets are essentially money and do not offer investors a stake in the future of a new company.
As for projects in the DeFi space, Joe thinks they may actually more dangerous than a typical Ponzi scheme.
“DeFi projects are are more risky than Ponzi schemes. In addition to expected exit-scam by project founders they can be unexpectedly hacked by external players.”‘
Joe says any technical breakthroughs that may be discovered by altcoin developers will still benefit BTC at the end of the day.
“Some [altcoins] have interesting innovations, even. These innovations development is paid by [expletive] coin bagholders but will ultimately benefit Bitcoin.”