Joshua Henslee: ‘Crypto’ bros are wannabe creatures from Jekyll Island

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Amidst the digital currency market chaos in the last week, BSV thought leader and developer Joshua Henslee released a video with his take on the situation. He outlines how we’re at a moment of truth on several fronts in the industry.

UST implodes, and the decentralization myth is exposed

Henslee begins by outlining what most in the digital currency industry are well aware of by now: Terra’s UST stablecoin has imploded and unleashed chaos across the markets. He informs us that LUNA token holders are much worse off than anyone else, but digital currencies are down across the board.

“I don’t know if this is the big pin that pops the bubble, but a lot of the signs are there,” Henslee says, mentioning institutional ‘FUD’ and people paying high premiums to switch from Tether into USDC.

“If Tether loses its peg, everything’s coming down way more,” he continues.

As for UST itself, Henslee reminds us that its founder Do Kwon was a typical ‘crypto bro,’ telling people to “have fun staying poor” and dismissing a tweet that outlined the exact way it could be attacked. He has since been humbled by the market and has taken to Twitter to outline a new strategy; decreasing the interest rate and printing more money. This is what Henslee means when he says they are “wannabe creatures from Jekyll Island”—it’s a reference to the Federal Reserve and how it handles every crisis.

Henslee also points out that Binance stopped anyone trading the UST stablecoin at below 70 cents (it has since halted and restarted LUNA trading). This is the hypocrisy of the highest order since its CEO Changpeng Zhao constantly talks about decentralization and letting markets work things out.

He also points out that the U.S. Secretary of the Treasury Janet Yellen has already pointed to the UST implosion to push for stronger regulations. Since the situation has worsened considerably since she last spoke, it’s likely that any regulations will be fast-tracked and tightened up.

Amidst the chaos, we are learning the truth

While the situation is currently dire, Henslee ultimately sees it as a good thing. He believes it will weed out many scam projects and leave people who really want to build useful applications.

Likewise, the current situation is revealing people for who they truly are. He notes a lot of borderline criminal behavior manifesting as people get desperate.

“It’s shining a light, and when the crash stops, it will allow us to see more clearly,” he says.

As for BSV, Henslee notes that it has also taken a hit, but it’s still useful. He believes it could fall further (although not necessarily), but it will have value as long as it functions as electronic cash and developers continue to build on it.

Continuing with his point about truths being revealed, Henslee notes that the narrative coming out of the media is that the crash is linked to inflation numbers. This would prove that BTC isn’t an inflation hedge, which Henslee is keen to point out it never was.

“BTC should rally if inflation is higher than expected. It shouldn’t crash,” he reminds us.

A Tether implosion would be a whole different ball game

Henslee then circles back to the point that Tether has lost its peg. He notes how they’ve already admitted they’re not 100% backed. He speculates that the majority of their backing is BTC. This would leave them highly vulnerable to moves down in BTC, which is the same thing that brought UST down.

If Tether doesn’t regain its peg, Henslee believes BTC will crash to below $3,000 again. He notes that the price of BTC is exactly in sync with Tether printing, meaning the two are directly correlated.

Do some insiders know something? It’s unclear, but Coinbase stock is getting hammered in the stock market. It has already stated that it will treat its customers as unsecured creditors in the event of bankruptcy, leading many to wonder about its future.

“All the signs are there,” Henslee says, wrapping up a video that offers lots of food for thought.

Watch: CoinGeek New York panel, Tokenized Assets, Stablecoins and Custody with BSV