We're starting to see the cascade of exchange failures, just like we saw in 2008 with the banks during the GFC. The exchanges all made loans to one another in order to backstop their customer's assets. Now that the value of those loans are evaporating the entire system is going to come crashing down all at once. This is a systemic crisis, and there is no white knight to save it.
I'm curious because a lot of this started (in the short term) with Binance dumping their FTT. Just yesterday it looked like a "4D chess move" because then Binance could acquire FTX for next to nothing. Now I'm curious if Binance just tipped over the gasoline can that can finally set this whole shitshow of uselessness ablaze, but potentially taking down Binance with it.
> cascade of exchange failures, just like we saw in 2008
They are related in both being cascading crises of confidence. ‘08 manifested from a novel opacity around correlation (lack of centralised counterparty reporting) from novel non-bank banks (shadow banks). This is just a three-point recursion cycle: FTX, FTT and Alameda.
There's a beautiful difference. Unlike in 2008, today
- I can transact efficiently and safely without a bank account. This is currently not possible in traditional finance
- Subsequently, none of my assets are locked. I have never stored assets in an exchange, and have no need to do so.
- Exchanges can't ask daddy government to mint coins for a bailout.
Tl;dr: exchanges and banks who think they can get away with being overleveraged, doing unbacked derivatives trading, lending without locates etc. are in for a bitter surprise. Crypto can't be gamed so easily and it shows.
"Solana’s native SOL token suffered as a result of FTX’s collapse, dropping over 40% on Wednesday at a price of $14.37. This is 92% below its price from a year ago."
I looked it up and it was trading for $230.23 on Nov 9, 2021. As of posting this comment it's at $13.16
At the end of day, this entire fiasco really drives home the point if its not your keys its not your coins. Shady exchanges/banks can always collapse and take your entire portfolio with it, but if you have a securely backed up wallet, then your coins will be untouchable no matter what kind of shady shenanigans goes down in the wider cryptocurrency landscape.
Another crypto crash? I'm surprised anyone would have serious money still in crypto after the last megacrash, which came after the previous crypto crash.
Nothing but crashes. Bitcoin crashed to $2 in 2011, then it crashed to $250 in 2015, then it crashed to $3000 in 2019, and now it's crashed again to $15000. Smart money knows to stay away and avoid the crashes.
because everyone following the best practices is unscathed.
everyone had a choice to just never touch TerraLuna.
everyone had a choice to not keep their funds on exchanges.
I'll give some sympathy to custodial smart contracts being drained and advertised as non-custodial, a legal distinction that has little practical distinction for the user except unlimited amounts and no permission needed to use. But you didn't have to use those either.
and overcollateralized stablecoins type fiat are still fine (for now)
and overcollateralized stablecoins type crypto are still fine with redemptions functioning smoothly through pretty amazing stress tests
other kinds of stablecoins are the ones that actually have implosions and make the news, with the notable exception and danger of Tether which still have passed every stress test despite such a large attack surface being consistently attacked by state actors very publicly
regardless, it has been entirely possible to have stable value in crypto the whole time, and in fact that's where a majority of the capital is, far beyond any hacks, exploits and exchange implosions. overcollateralized stablecoins are still $120bn and has been a steady amount for the past year. redemptions go well when desired, people just don't desire.
and then for the people that actually have the risk profile for volatile assets and self-custody those assets? they're fine too. let the VC and bankruptcy trustees fire-sale, let everything trade for another 90% discount, that's not controversial, commodities trade like that, digital commodities are trading similarly.
The old saying goes, when you are getting stock tips from your cab driver, get out of the market. Maybe the same should be true for arena's. When your local arena is named after a crypto site, sell your coins.
Why both deposits and withdrawals? They risk spooking their customers by preventing withdrawals. If you wanted to mitigate risk, wouldn't you just prevent deposits/buys?
What I really wonder a lot is who will left with the money when the music stops and the tide goes out. Early adopters? Crypto mining hardware manufacturers? Electricity companies? Generation machinery manufacturers?
Lambos and mansions and even jets of lucky crypto bros are just a small change on how much dough was buried in all the crypto schemes of the world.
Crypto.com are not long for this world but I don't think this is their demise, rather, this is specifically the Solana blockchain, which is... well, it's not a traditional blockchain. More a reflection on Solana (and it's vulnerability to the demise of FTX) than Crypto.com.
Idgi, the Solana network functions normal, and SOL is not intimately tied to FTX. They only reason they would do this imo, is if Crypto.com itself has problems (they want to slow withdrawals?). What am I missing here?
"More than 18 million coins worth approximately $320 million will hit the cryptocurrency market in the next 24 hours after they are released from staking. ... In addition to the aforementioned 18 million SOL, the market should be ready for a 1.7 million Solend whale liquidation; the whale borrowed 30 million USDC against his two million SOL collateral. A total of 96.7% of his loan is backed by the cryptocurrency that is rapidly losing value on the market right now. Technically, liquidation has been triggered already, and the borrow utilization greatly exceeded the liquidation threshold by more than 50%..."[1]
[+] [-] woeirua|3 years ago|reply
[+] [-] hn_throwaway_99|3 years ago|reply
[+] [-] dehrmann|3 years ago|reply
Fortunately, unlike 2008, the global economy doesn't depend on this stuff working.
[+] [-] JumpCrisscross|3 years ago|reply
They are related in both being cascading crises of confidence. ‘08 manifested from a novel opacity around correlation (lack of centralised counterparty reporting) from novel non-bank banks (shadow banks). This is just a three-point recursion cycle: FTX, FTT and Alameda.
[+] [-] princevegeta89|3 years ago|reply
[+] [-] Kukumber|3 years ago|reply
it's a noise https://coinmarketcap.com/exchanges/crypto-com-exchange
it's the failure of all the suspicious exchanges for sure
[+] [-] _qqm5|3 years ago|reply
- I can transact efficiently and safely without a bank account. This is currently not possible in traditional finance
- Subsequently, none of my assets are locked. I have never stored assets in an exchange, and have no need to do so.
- Exchanges can't ask daddy government to mint coins for a bailout.
Tl;dr: exchanges and banks who think they can get away with being overleveraged, doing unbacked derivatives trading, lending without locates etc. are in for a bitter surprise. Crypto can't be gamed so easily and it shows.
[+] [-] TSiege|3 years ago|reply
I looked it up and it was trading for $230.23 on Nov 9, 2021. As of posting this comment it's at $13.16
[+] [-] TechBro8615|3 years ago|reply
[+] [-] zmaurelius|3 years ago|reply
[+] [-] ricardobayes|3 years ago|reply
[+] [-] FollowingTheDao|3 years ago|reply
[+] [-] noveltyaccount|3 years ago|reply
We'll see what happens next.
[+] [-] paulpauper|3 years ago|reply
We're seeing the dominoes fall before our eyes.
crazy
[+] [-] AznHisoka|3 years ago|reply
What is fascinating is that The S&P 500 is up around 10% since Feb 2020 (pre covid) while BTC is up 50% since.
[+] [-] matai_kolila|3 years ago|reply
What a wild ride it's been.
[+] [-] Havoc|3 years ago|reply
[+] [-] m00x|3 years ago|reply
[+] [-] andrewstuart|3 years ago|reply
[+] [-] throwup|3 years ago|reply
[+] [-] yieldcrv|3 years ago|reply
everyone had a choice to just never touch TerraLuna.
everyone had a choice to not keep their funds on exchanges.
I'll give some sympathy to custodial smart contracts being drained and advertised as non-custodial, a legal distinction that has little practical distinction for the user except unlimited amounts and no permission needed to use. But you didn't have to use those either.
and overcollateralized stablecoins type fiat are still fine (for now)
and overcollateralized stablecoins type crypto are still fine with redemptions functioning smoothly through pretty amazing stress tests
other kinds of stablecoins are the ones that actually have implosions and make the news, with the notable exception and danger of Tether which still have passed every stress test despite such a large attack surface being consistently attacked by state actors very publicly
regardless, it has been entirely possible to have stable value in crypto the whole time, and in fact that's where a majority of the capital is, far beyond any hacks, exploits and exchange implosions. overcollateralized stablecoins are still $120bn and has been a steady amount for the past year. redemptions go well when desired, people just don't desire.
and then for the people that actually have the risk profile for volatile assets and self-custody those assets? they're fine too. let the VC and bankruptcy trustees fire-sale, let everything trade for another 90% discount, that's not controversial, commodities trade like that, digital commodities are trading similarly.
[+] [-] guelo|3 years ago|reply
[+] [-] giarc|3 years ago|reply
[+] [-] jti107|3 years ago|reply
[+] [-] bittytitty|3 years ago|reply
"Many shall be restored that now are fallen and many shall fall that now are in honor" -Horace
[+] [-] m00x|3 years ago|reply
[+] [-] adrr|3 years ago|reply
[+] [-] geerlingguy|3 years ago|reply
[+] [-] stusmall|3 years ago|reply
[+] [-] SergeAx|3 years ago|reply
Lambos and mansions and even jets of lucky crypto bros are just a small change on how much dough was buried in all the crypto schemes of the world.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] olliej|3 years ago|reply
[+] [-] phphphphp|3 years ago|reply
[+] [-] fragmede|3 years ago|reply
* https://u.today/320-million-in-solana-will-hit-market-in-24-...*
[+] [-] _3u10|3 years ago|reply
I’ve never understood stablecoins it’s as dumb as a USD ETF
[+] [-] traveler01|3 years ago|reply
[+] [-] FollowingTheDao|3 years ago|reply
[+] [-] FollowingTheDao|3 years ago|reply
Bitcoin at 1000 by March 1st.
[+] [-] booleandilemma|3 years ago|reply
[+] [-] SkyMarshal|3 years ago|reply
[+] [-] nailer|3 years ago|reply
[+] [-] gitfan86|3 years ago|reply
[+] [-] wzy|3 years ago|reply
Can you imagine how many times that exact phrase was thrown at new investors to FTX or any other such crypto?
[+] [-] danrocks|3 years ago|reply
[+] [-] tell3|3 years ago|reply
[+] [-] Animats|3 years ago|reply
And that's just stuff that's publicly known.
[1] https://u.today/320-million-in-solana-will-hit-market-in-24-...
[+] [-] sumeno|3 years ago|reply