The other day I was thinking about trading and trading platforms. Because I am new to the field, I might not understand certain things you guys might already know.
For example, when you buy a stock, say AAPL, how do you get out your AAPL from the exchange?
Buying stocks means you have a contract stating that you are partially an owner of a corporation. Typically broker is the one creating those contract when you buy and sell. This contracts will give you ownership to your stocks and there’s a huge difference between stocks and cryptocurrency so you should not compared them as similar thing.
Bitcoin can be compared to Gold and Fiat because it’s currency in crypto.
And projecting this thought to the crypto exchanges, what if some well known CEX do not have enough BTCs that is being traded on that exchange? All that numbers and volume could be fake. Then the CEX is becoming like a traditional bank, where unless everyone will want to withdraw their BTCs, they are ok trading non existing BTCs.
well, what do you think?
This is actually what’s happening on CEX for example FTX, FTX liability is greater than their assets that makes them collapse after their customers pull out their balance. Some CEX is using their customer money on different investment just like banks doing on our money but crypto is worst because there’s no transparency on the proof of reserves that will show customer balance is 100% backed by exchange reserve.