Cryptocurrencies offer mixed incentives to financial services industry incumbents.

Incumbents like the fees that they charge players to trade crypto and the interest they extract to leverage their risky wagers. At the same time, regulators require banks to know their customers (KYC) so they don’t launder criminals’ money.

Sadly the most basic principle of cryptocurrencies is embedded in their name — the people who own it do so anonymously.

Crypto goes up fast when people can borrow money to control more than their cash can buy as its market price soars. Rising prices spur the urge to borrow money to control more crypto.

When prices fall, crypto exchanges demand that account holders top off their accounts with cash — failing that the accounts are automatically liquidated.

What’s more. crypto demand would decline if the government decide to punish — or impose disclosure costs — on financial institutions who get involved in crypto trade.

These market dynamics are