fiat commodities vs crypto commodities(assets)

[franky1]

ok first.
a commodity is a base product used to produce other products
300 years ago this was raw produce..
such as
beef=burger
gold= jewellery
oil=fuel

it then evolved into
mortgage agreements=derivative baskets

and now they(regulators) wish to call any mainnet(base producer) crypto currency that has a bridge/peg mechanism to a token. to be classed as a commodity
EG
ethereum=NFT erc-20 tokens like FTT
bitcoin=liquid

..
so now lets delve into my point of comparison between how the fiat commodity market of say wheat. compares to the crypto commodity market of say ethereum

fiats crypto commodity of ethereum has no limited supply much like wheat
but bitcoin does have a limited supply (like gold/oil)

so when deciding to get into the wheat or ethereum market. both are comparable.
however some notable fiat investors such as warren buffet dont actually buy wheat stock. instead the buy farms that produce wheat. so that if wheat has a good year the farm has a good year and thus buffet wins via a better farm valuation.
if wheat has a bad year. buffet can still sell the farm and recoup some value from seling the land, harvester equipment,

however in crypto. because it doesnt own land or buildings to set up a crypto business
if avoiding ethereum but wanting to buy a company that creates/uses ethereum.. those companies are not actually valued as well as real commodity produces of farming wheat

EG buying an exchange like FTX has no fully owned office space, and employees work remotely thus no electronic assets to sell. (they rent amazon AWS servers)

this means for instance if you bought into FTX becasue they do stuff with ethereum.. if their ethereum deposits have a bad year. ftx has nothing of value... as we all learned
(ftx had alot of ethereum an its other tokens were ethereum pegged tokens)

mining pools or staking syndicates have no central land/office/servers that have value to the company(its all decentralised)

so the warren buffets of fiat investment. dont want to get into crypto business purchasing and have never been into buying the underlying commodity(asset) whether fiat based or crypto based

this is also true for the so called "trusts" (premature ETF's)
though they sell shares/tokens of a trust and have collateral of commodity assets. the fiat investors that plan investments the same way as warren buffet wont buy the trust shares or even ownership stakes of the management companies of the trusts.

even if regulated(some think its   the hold up of mainstreaming) to show accounting and viable/sustainable reserves. if the commodity prices shrink. there is not enough office building ownership or land or equipment of these crypto companies to have a separate good value worth investing in as a backup to the underlying asset stored in collateral

again take FTX. it has no land, bought office or equipment. it was run by about 60 people who mostly worked remotely. thus there was no company equipment to put to auction should their FTT and ethereum (and bitcoin) disappear

there is no way we can get the warren buffet investor types to see crypto as something they would invest in even with extra regulation

that said. for other fiat investors. who are less like buffet.
regulation of "proof of reserves", regular auditing to satisfy a good true company valuation or trust collateral total. would give resolution to some fears. but these regulations should be more about investor protection. and not bureaucracy of more paperwork required by investors, and limitations on their trade ability/involvement

i say all this because there is alot of economic speculation about the whole saga of regulations trying to swap from SEC to CFTC. and crypto companies impact on the perception of the industry as a whole and the impact regulations can then cause either more mainstreaming or just a waste of time

the whole last 5 years of leaping back and for the from asset or commodity classification thus sec ->cftc->sec->cftc is keeping mainstream investors like pension fund managers away. because regulators cant make their minds up and actually finally decide what rules crypto businesses need to follow, and what stock/commodity(ftse) or share/security(nasdaq) exchange to list their company publicly on

the lack of investor/consumer protection regulation and the obsessions with excessive AML/KYC also doesnt favour pensions portfolio managers

by excessive KYC. its not just KYC of the users of the exchange/company. its the paperwork and KYC even outside of businesses that are being proposed. even at the individual coin tx outside of the company requirements. is a headache for funds managers to process. when they want to arbitrage or allow withdrawals for their own customers day trading

i dont see an easy 'sec allows ETF' and boom mainstream event..
i dont see it happening any time soon. nor a flood of new investors the day it does happen...
...unless the SEC& CFTC modernise and actually realise crypto is not like wheat. a farm is not like a custodial wallet/mining pool and the fiat rules of securities or commodities do not fit all crypto asset types

[1714942571]

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[1714942571]

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[1714942571]

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[Fortify]

ok first.
a commodity is a base product used to produce other products
300 years ago this was raw produce..
such as
beef=burger
gold= jewellery
oil=fuel

it then evolved into
mortgage agreements=derivative baskets

and now they(regulators) wish to call any mainnet(base producer) crypto currency that has a bridge/peg mechanism to a token. to be classed as a commodity
EG
ethereum=NFT erc-20 tokens like FTT
bitcoin=liquid

..
so now lets delve into my point of comparison between how the fiat commodity market of say wheat. compares to the crypto commodity market of say ethereum

fiats crypto commodity of ethereum has no limited supply much like wheat
but bitcoin does have a limited supply (like gold/oil)

so when deciding to get into the wheat or ethereum market. both are comparable.
however some notable fiat investors such as warren buffet dont actually buy wheat stock. instead the buy farms that produce wheat. so that if wheat has a good year the farm has a good year and thus buffet wins via a better farm valuation.
if wheat has a bad year. buffet can still sell the farm and recoup some value from seling the land, harvester equipment,

however in crypto. because it doesnt own land or buildings to set up a crypto business
if avoiding ethereum but wanting to buy a company that creates/uses ethereum.. those companies are not actually valued as well as real commodity produces of farming wheat

EG buying an exchange like FTX has no fully owned office space, and employees work remotely thus no electronic assets to sell. (they rent amazon AWS servers)

this means for instance if you bought into FTX becasue they do stuff with ethereum.. if their ethereum deposits have a bad year. ftx has nothing of value... as we all learned
(ftx had alot of ethereum an its other tokens were ethereum pegged tokens)

mining pools or staking syndicates have no central land/office/servers that have value to the company(its all decentralised)

so the warren buffets of fiat investment. dont want to get into crypto business purchasing and have never been into buying the underlying commodity(asset) whether fiat based or crypto based

this is also true for the so called "trusts" (premature ETF's)
though they sell shares/tokens of a trust and have collateral of commodity assets. the fiat investors that plan investments the same way as warren buffet wont buy the trust shares or even ownership stakes of the management companies of the trusts.

even if regulated(some think its   the hold up of mainstreaming) to show accounting and viable/sustainable reserves. if the commodity prices shrink. there is not enough office building ownership or land or equipment of these crypto companies to have a separate good value worth investing in as a backup to the underlying asset stored in collateral

again take FTX. it has no land, bought office or equipment. it was run by about 60 people who mostly worked remotely. thus there was no company equipment to put to auction should their FTT and ethereum (and bitcoin) disappear

there is no way we can get the warren buffet investor types to see crypto as something they would invest in even with extra regulation

You seemed to get confused about half way through your ramble. The FTX company, like any other, was valued on what it could earn, it's customer funds did not show up on it's books as company assets (that it owns or can spend). FTX was making money from all the different fees, through different transaction types, that it was able to charge it's customers for being the guardian on those funds. At least that was how it was meant to work in practice. If it was a properly run company then customer funds would have been segregated, they would have moved in value with the market, but no creditors would have be able to take them away in an administration process if it failed - we can see all that was an illusion however because they were abused.

[franky1]

FTX was NOT worth $32billion
in no way at all by any measure

FTX was basing its value on the market cap of FTT tokens
those tokens were like 356million tokens

but people didnt put in $32billion of fiat to buy up all of them tokens to give FTX cashflow to have a real value

instead it was all paper value of like $400m-$2bill FTT bought

where those only bought a 1/16th - 1/5th of tokens depending on the price per token at the time of the buy-ins

..
its like any company 'paper valuation' or even a crypto market cap
they are only valuated/market capped based on current market rate of one small market order multiplied by total token/share supply

..
as for cashflow from other trade volume.
that too does not meet the values that show an adequate cashflow to valuation multiplier.

no warren buffet style investor would see the FTX company valuation and think 'yea thats true good value, ill buy that. im protecting my store of value buying that'

when any company tries to do a 16x multiplier. investors should stay away

[Hydrogen]

It could be fair to say markets and commodities denominated in fiat have become dominated by short term gains. No one cares if capital gains taxes reward HODLing of assets. The overwhelming majority of finance and economics revolves around fast money.

This created a vacuum in markets emphasizing the creation of long term value which was leveraged by crypto. Stablecoins and deflationary assets like bitcoin might be considered some of the main pillars propping up the market cap and overall integrity of crypto. The strongest assets of which, are designed to build long term value and stability. By the same token (no pun intended) the weakest and most unreliable portions of crypto markets were oriented around short term gains.

Fiat vs crypto might be described as having different fundamental design philosophies: short term gains vs long term value.

The same lense might be directed at things like KYC and AML in terms of cost effectiveness and results. While central banks might deploy those policies, there is a potential for them to be more damaging to their financial goals over the long term, in contrast to any perceived benefits they provide. Do banks or governments have to care if people living in poverty in nigeria earned $5 additional capital through crypto? Is it so important that they must implement AML and KYC? Or could it be more damaging to bank policy over the long term, as consumers chafe under the policy? I honestly have not the slightest clue.