I also think the offer to buy FTX was motivated by a desire to avoid a broad crypto collapse which would hurt Binance along with everybody else. But that offer had to be withdrawn because things got so bad.
Now everybody involved is worse off than they were before, a lot of customers might lose money, and there is a pretty good chance that regulators and governments are going to get more involved in the crypto market in response.
If this was planned in advance, it was not 4D chess, it was just a really bad plan.
It seems clear from CZ's public announcement of a $2b FTT dump that their intention was to destroy FTX and Alameda. So my theory is that the LOI was a trap to put a nail in the coffin, destroying any remaining trust in FTX.
Before they were merely starting rumors; the phony acquisition attempt let them declare "we've seen the books and FTX is unsalvageable".
FTX could have just been illiquid. With a lot of loans to other crypto players who would do fine if FTX were rescued. Turns out, they weren’t. They were fundamentally insolvent.
Personally, I think they would have known the size of the hole as well, and never intended to go through with the buyout
Instead of quietly selling off their holdings over time, the CEO tweeted their intention to sell and triggered a death spiral.
Binance didn't benefit by announcing it either. The token dumped before they liquidated, and they didn't scoop up their competitor.
Fortunately, unlike 2008, the global economy doesn't depend on this stuff working.
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.
it's a noise https://coinmarketcap.com/exchanges/crypto-com-exchange
it's the failure of all the suspicious exchanges for sure
It's quite possible that the public perception poison will be way worse than any collapses themselves because these players have tried so hard to associate themselves with crypto in the public eye.
- 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.
Even if you don't use exchanges, you are still exposed to their failure because they are major players in the market that determines the value of the cryptocurrencies. When major players in a market go bust, it's unlikely that any of the other market participants will end up unscathed.
Given that crypto value is based solely on what other people are willing to pay for it, it really could go to zero. It probably won't go all the way to zero, but I'd still expect a significant drop.
I also don't have illusions about price action. I don't invest into crypto to make a quick buck. I invest because I fundamentally oppose traditional finance.
The entire crypto market is nothing but market manipulation and speculation. If that goes away your crypto will be virtually worthless.
 pre-empting the "but it's used for practical things in countries with crumbling economies instead of the local currency" argument: yes, but that's such a tiny portion of total market cap that it probably doesn't affect the value of your holdings by any meaningful amount.
Also good ol' fiat dollars are better than crypto for that use case in pretty much every way.
> You only use crypto to pay your rent and buy your groceries and your clothing? Your employer pays you in crypto?
Oh how I wish that was true.
I'd wager the propping was part manipulation and part speculative mania, of which the latter his been dispelled.
I'll believe the mania is over when Bitcoin reverts to pre-2017 prices and stays that way forever. Honestly I've been considering buying some because I suspect the dip will be temporary, but ultimately I'm not that foolish with my money.
there is no such thing as traditional finance, just finance.
Of course finance is an incredibly nuanced word. To quote V. Buterin:
> Finance can be viewed as a set of patterns that naturally emerge in many kinds of systems that do not attempt to prevent collusion
finance, trading, barter, humans will not allow collusion to continue unchecked. so finance being defined partly as the lack of check against collision is pure propaganda by Buterin and you are his mark. the only reason the collusion rife in the crypto space is so unchecked is because its a big casino constructed for you to play in by people like SBF, CZ, V. Buterin. The whales represent a huge cartel. The drama of the last few days is a parable of collusion, retail being tricked into gambling their life savings, retail being fed lies about how the word is and how the world is not, lies which are easy to disprove.
you are a classic retail mark, being fed and regurgitating marketing and propaganda to encourage you to play your part.
look up retail FX trading manias in Japan in the early to mid 00's as recent past as prologue.
Why is this kind of defensive retort so commonly seen in discussions about the value of cryptocurrency?
I am not defensive, I am embarrassed for you and all of the people poisoned by this antisocial propaganda, and it makes me despair for humanity.
For instance, I really like your view of finance as these emergent properties of human behaviour. My question is then: how do you propose we refer to the entities we currently have in place for trading of securities, market making, fractional banking, clearing houses, central bank issued fiat, etc? Clearly there is a difference between those "things" and what we do in DeFi, right?
So what label am I allowed to use to distinguish these entities from DeFi?
Calling something propaganda without being familiar with the source is probably the purest form of irony.
The whole idea of crypto attracts the same people as other get-rich-quick schemes. Some scammers, some earnest people. But all ultimately lacking in self control.
The throne is never empty, right? We are probably still to find out if it’s worth sitting on long term, but since that genie left the bottle, I suspect it is.
When you buy an asset from heavily leveraged market you get high risk even when you don't use leverage yourself.
In crypto, leverage exists solely because of people who aren't doing self-custody and DeFi. They brought this upon themselves.
My understanding is that the vast majority of cryptos are useless for actually paying for anything and the vast majority of businesses still don’t accept them anyway. So unless you are basically only using and holding BTC (which has a relatively small market of goods that can actually be purchased with it on a daily basis), I’m not really sure what good that crypto is doing for you other than sitting around as a speculative asset which will need to be converted via an exchange.
I don't "invest" to make money. It's a currency. I buy it to use it. I might have to hold it for 5 years, maybe 10, maybe 30, or maybe I'll die and crypto will never be successful (a sad thought but possible).
But in the meantime I'll do what I can to improve adoption. That includes working on core protocols, improving UX for non-technical users, or writing software that helps vendors with payment integration. I also make an effort to approach business and show that there is demand for crypto payments.
This is literally the only way to make crypto successful. All this price action non-sense, and people wanting to get fiat-rich is just unproductive noise to me.
You don't properly evaluate the present value of money if you are willing to trade your present money for future money at completely unknown conversion rate and adoption date.
Relative to the strategy of buying it when you could use it (which also satisfies your intents) you are practically speculating. You can also look at it like opportunity cost.
Unknown can mean many things. I'm convinced that the fair value of crypto is much, much higher. Adoption is still sluggish and small.
I believe in crypto's success, which you might call speculation.
Why are you buying crypto regularly? If you don’t care about the price, and you have no idea what the fair value is - what’s the right coin and right amount to hold?
> what’s the right coin and right amount to hold?
That's an amazing question. I have truly no idea. I'm investing based on my personal conviction.
But this opens up a really interesting discussion about game theory and prediction markets. In a zero-sum prediction market, refusing to play is pareto-optimal and an equilibrium strategy.
So you could call me an irrational actor. I'm making a first move based on personal belief, thereby giving you an opportunity to arbitrage me. I believe that the fair value is higher than it is now. If you believe differently, short me. (I'm just joking of course, but I do find your question intriguing, and is something I've been thinking about a lot)
This seems like an incredibly bold claim to make. I would argue that there is little adoption because many have judged crypto to be of little value.
If only everyone was buying various crypto and holding it in a cold wallet for the next 300 years!.. that’s the only true usage for crypto. No insidious banks, no fiat, no regulations, just pure bits in my virtual wallet until I die.
The value of most coins is going to zero as a result of this. Crypto is going to be a frigid wasteland after this for quite a while.
But yeah, you're right, a currency nobody uses is obviously worthless. I'm attempting to drive adoption so that they CAN be exchanged for goods and services.
You are incredibly exposed to the same risk that these exchanges have.
How do you handle refunds? Converting twice? Sure, charge users for it, you'll be driven out of the market by businesses who are not scared to keep a crypto wallet liquid.
This dynamic actually exists even in much more conservative/slower moving fields like hardware manufacturing. It's a slow process
But yeah, something tells me the taxman isn't all that interested in your bitcoins.
Even if crypto catches on more than it has, I do not think everybody will want to deal with it. I am do not do any importing or exporting. Dealing with another currency just seems like wasted energy.
> I do not think everybody will want to deal with it.
The thing is, crypto should be much, MUCH easier to deal with, we just don't have mature software/UX around this. Because we're still figuring out best practices, and people are learning about this tech.
"Crypto Currency Now Accepted For All State Tax Payments"
I looked at the Colorado site. I predict this will also get shut down. Basically you are paying more just so you can say, "I paid my taxes with cryptocurrency", which honestly seems stupid.
No it doesn't. Your crypto is not and will not be denominated in crypto. It's still dollars.
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
I’m not sure “not your keys, not your wallet” is really the message to take away from ~Celcius~ ~Terra~ ~TAC~ FTX.
The genie is already out of the bottle and there is no way to put it back. There will always be those especially in the younger generations that want something better than the current system. Bitcoin shows that you can have a completely transparent monetary system based on code that is available to be audited by anyone. Bitcoin may or may not survive, but the idea behind it will.
And if another system eventually wins... then isn't that simply an example of a cabal of people (though not necessarily rich at first in this case) modifying the rules for money supply? Doge produces a different outcome than BTC. That's important.
A slightly better solution would be a no premine coin with a global announcement for 5 years before the mining begins so everybody gets a fair shot at participation. I am sure we can develop even more fair forms of distribution with sufficient research.
I also don't think that going backwards is a good thing. Yes, BTC is more equitable than a system of divine right of kings where the monarchy literally owns everything. Hooray.
I don't get it. How does this description fail to encompass the likes of SBF, CZ, or Do Kwon? And while they didn't modify the money supply (although UDT kinda did), their actions had a strong impact on the value of money. So anyone holding coins in their own wallets still got screwed by their actions.
It has been a while since I set up but last time I did I had to download the blockchain’s ledger aka the history of every single transaction. Is this no longer the case?
Is this satire?
Because crypto currencies are not the gleaming example of “free of manipulation” that you think they are. There’s endless cases of whales, exchanges, NFT groups and crypto-celebrities using their capital and power in order to manipulate markets and supply in exactly their favour. The NFT space was especially bad for this. In fact, a lot of those NFT groups are exactly what I’d describe as a “cabal”.
The grabbing hands grab all they can
Everything counts in large amounts
Is this really true, given that the largest currency pair of Bitcoin is with USDT, which is alleged to have been arbitrarily created at whim to pump up the price of Bitcoin?
Sure, this isn't it though.
Perhaps a portion of these donations could have come from other sources if cryptocurrencies did not exist, but there isn't really a good way to quantify that, so I won't go into that discussion.
Then again, a crypto bro blaming the victim makes perfect sense.
NATO pushing closer to Russia the past 30 years didn't protect anything except the paychecks of the war makers.
I mean they are so not evil they commit war crimes on camera.
> NATO pushing closer to Russia the past 30 years didn't protect anything except the paychecks of the war makers.
NATO pushed closer to Russia over the past 30 years because of exactly what Russia is doing in Ukraine.
And with credit card, the donation recipient wouldn't be at risk of losing double digit percentages of the value donated if they didn't immediately cash out into fiat currency.
I love how every crypto enthusiast (incl Vitalik) uses this one-off example to justify everything these days.
if this is a stab at the federal reserve, my response would be "democracy" at least in the abstract. either way not much different from the whales that hold disproportionate amounts of influence in the system right?
The point is stop trusting centralised wolf in sheeps clothing.. same goes for ethereum with Proof Of Stake.. ur just reinventing central banking (but private)..
The only truly decentralised coin is bitcoin..
time to end the crypto social experiment and go back to using the traditional banking system which has safeguards in place to prevent people from being continuously taken advantage of. oh wait, nobody was really using crypto for anything other than a FOMO investment anyways
Granted it's still slow...
Real transactions are much cheaper. Try https://mempool.space/
Basic transaction cost at this time is est $0.05, or 54 cents for high priority.
> slow transaction times
If by slow you mean ~10 minutes, it turns out this is a strength (Solana is not scalable; Ethereum will also likely grow in an unbounded fashion making individual node-running infeasible); and layer 2 solutions such as Lightning Network enable sub-second Bitcoin transactions.
The people and technologies claiming to have "fixed" or "improved" upon bitcoin are often making different trade offs they lie about. This is why I like solana, they make no pretence of being decentralised.
btw fiat is 1000x worse. You don't see it on the news because you're forced through coercen to bail out & insure these bad actors. The current US bank reserve requirement is 10%.. the only reason there isn't a bank run is FDIC. The whole thing is an incestious mess that creates our current world of cantillionaires..
If you believe that crypto is in any regard better than the traditional banking system (which it seems you do), please state those claims explicitly.
Crypto is extremely speculative and risky and everyone knows it.
Housing on the other hand, get extremely favorable regulation that's unjustified in my opinion. You got the Fed buying mortgage backed securities.
In my view, what is going on in traditional finance is morally wrong much more than in crypto. Unlike crypto were the bubble doesn't effect me, I need to work and pay higher rent and my freedom is restricted as a direct consequences of the evils of traditional finance wether I'm participating in their bubble directly or not.
Many of the things you call "safeguards" of traditional finance are greater evils than nothing at all. Especially safeguards of collateralization, like mortgage.
(And don't get me wrong - I'm very capitalistic in my world view. You can just hardly call capitalism the way the Fed and mortgage dealers acted, and central banking is the bane of modern capitalism).
Basically no exchange should be holding enough to cause a collapse of the coin. With bitcoin this will never happen, there was multiple collapses at times where liquidity & ramps were non existent.. and bitcoin still survived to go up multiples.
And Monero IMO
a wish against a world that doesnt make sense to them
a desire to turn away from human society
a hoarder's dream
What a brave new world crypto is bringing us.
This has always been the case with crypto. It's just much harder to successfully execute with crypto than it is with cash.
People don't want to buy and hodl, they want to get rich. There's no Benjamin Graham for crypto because crypto has no fundamentals, no underlying value to go long on. The best any crypto advisor can do is to warn you when to hit the ejector seat button.
To hold your own keys etc is just too complicated.
I dont want to put 100k onto a USB drive where I may forget the PW to.
Crypto is just not going to hit mainstream if you cant get exchanges "banks" to stop selfimploding.
I hope Coinbase is and stays an honest (and regulated) player in that crazy space:
80% is newsworthy.
edit: What I want to run an analysis of the actual data but I did the "next best thing" which is googleing around and reading arbitrary articles, and what I've found is
-22% on 15 January 2015
+28% on a single unspecified day in July 2017
+~25% on 7 December 2017
+~20% on 1st April 2019
I'm sure I've missed some, and there are other, possibly more dramatic spikes and crashes, that happen over longer periods, but this is enough for me to say that a 12% swing in one day is newsworthy, but not frontpage newsworthy
You can be a bitter anti-crypto person without _enjoying_ people's pain wtf.
We'll see what happens next.
We're seeing the dominoes fall before our eyes.
What is fascinating is that The S&P 500 is up around 10% since Feb 2020 (pre covid) while BTC is up 50% since.
What a wild ride it's been.
I think we can safely put the claims about crypto offsetting inflation to rest.
The money builds a new factory. Or in the case of Google, a data center, or other such item that allows the company to make more money.
Later, when the company is worth more, the shareholder sells the stock back and/or gets a dividend (aka, a slice of the profits).
In contrast, the BTC you bought was likely made using stolen electricity. So we're already negative sum to the start.
An actual difference is that current inflation levels make another round of stimulus checks highly unlikely. And the current nominal rates for risk free treasuries are high enough to keep large scale cash parked outside as well.
During the previous run ups, we didn't have institutional investors buying billions of Bitcoin, we didn't have public companies (TSLA) buying a billion dollars of BTC for fun, we didn't have sports stadiums with the name "crypto.com", or ads on TV.
BTC achieved mass adoption during 2020/2021/2022. It's available in 401k funds, derivatives on the stock market, etc.
The only catalyst I can think of that could truly catapult BTC back to the heights of 2020/2021 is if we get to a point at some point in the future where BTC is actually useful for something other than asset speculation and people trying to get rich quick. This could take years.
a purchase traceable down to the KYC’d buyer dumb enough to put their purchase on a public, immutable ledger
It is this bad for crypto right now, and there's going to be no cheap cash coming to rescue it for quite some time.
I think it is still possible that there might be a floor down at $4k or so where all the True Believer billionaires may still step in to buy it up and rescue it. If the billionaires themselves are net sellers though needing to raise cash because everything else is in flames (e.g. Elon+Twitter) then it may just fail.
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.
and that's not controversial, I'm perfectly fine with that and everyone in the space should be just as objective about their risk profile. We both agree that any other sales pitch for crypto was grifter bingo.
I don't consider this platform for investors to be perfect yet, for example I don't consider any stablecoin overcollateralized by fiat to be 'good' and I don't consider any of the stablecoins overcollateralized by crypto to be great yet, there is a lot to build and a lot of value to extract building.
Where? Which crypto investments would have resulted in that during the "whole time"? Or even just the last few years?
in direct contrast to storing on exchanges, or non-stablecoin crypto assets
you can convert them on DEX’s to other cryptos
you can sell them on OTC desks
you can redeem them for their underlying collateral if using onchain collateral, or with the issuer
stop using exchanges. in crypto they are occasionally part of the journey but people act like they are the destination.
If you ever want normal people to use crypto, exchanges or banks or something similar have to be part of it. Securely storing crypto is just too hard for normal people.
Its also accurate that I don’t care about that and I’m never one of the people pushing for “mainstream adoption”. The alpha exists while it is hard. The Venture Capital exists to bring capital to a place where it is hard. Most of the platforms are financial services. Traditional finance has many obscure financial services that mainstream never directly interacts with and its the same here. In both, there are nuances in having access. You need special hardware and special accounts to be a merchant or payment processor, you need special permission and infrastructure to trade credit default swaps, you have to jump through many hoops to self-custody any paper-claim to an asset. These arent games for mainstream. If you want to jump through those hoops you can.
And you think the value is going to rise without increased adoption? Or that actually using your Crypto to purchase goods and services is going to become easier without increased adoption?
Why hold stables? I’m confused why you’re interested in coin pegged to inflationary fiat. The yield accounts are all scams, so that’s definitely not a good idea.
for users its just a convenience for staying onchain and having stable value while awaiting other opportunities, if you have the risk profile to hold something else then do that. Its just a trade and a few months of single digit inflationary pressures really is a non-issue
"Many shall be restored that now are fallen and many shall fall that now are in honor" -Horace
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.
Citation definitely needed. I'd say the opposite. From a few days ago...
I’ve never understood stablecoins it’s as dumb as a USD ETF
"how do i convert crypto assets into USD without triggering a taxable event?"
the answer was create a stablecoin where you for sure have $1 for each coin so you can always exchange your crypto for dollars.
the problem is all these shady crypto finance people are busy making money off of stablecoins and hoping nobody catches them without enough cash on hand since they invested the USD into assets instead of just holding cash, or when the value went up they minted more stablecoin to sell off and now that the price of the stablecoin is down they don't have the ability to cover their liabilities.
The basic idea to protect against taxes, the extended idea is to enrich every grifter around.
You don’t: “Taxable gain or loss may result from transactions including, but not limited to: [...] Exchange or trade of one digital asset for another digital asset.” 
You can't hack around taxable events by avoiding exchange into fiat.
That's the purpose. If you sell a crypto for USD you may get taxed. If you convert it to equal amounts of a different crypto there are no gains and no tax.
If your basis (purchase) value—irrespective of the current value—of Crypto A is $100, sure. But that would be the same if you converted into actual USD.
But if you actually had gains on Crypto A, say the purchase price was $50 and you sold for $100 worth of USDT, you would have a $50 taxable gain.
“A16. [...] If you exchange virtual currency held as a capital asset for other property, including for goods or for another virtual currency, you will recognize a capital gain or loss. [...]
“A17. Your gain or loss is the difference between the fair market value of the property you received and your adjusted basis in the virtual currency exchanged. [...]” 
> If you sell a crypto for USD you may get taxed. If you convert it to equal amounts of a different crypto there are no gains and no tax.
No, you will owe taxes in exactly the same situations as you would if you exchanged the crypto for USD: if the value of what you sold it for exceeds the basis (not current) value of what you sold.
Now, its possible that you can find a crypto exchange that doesn’t deal in US currency or with US banks and is less likely to report information to the IRS, so that trading into stablecoins or other crypto helps you evade taxes that are legally due. But it is not a hack around actually having a taxable event. (In fact, it potentially, if the stablecoin isn’t perfectly stable, makes the purchase with the stablecoin as well as the sale into it a taxable event, which would not be the case with actual USD.)
There's no "if it doesn't touch USD it doesn't trigger taxes" law because that would be instantly gamed and exploited.
Crypto is the same.
Why do you think converting from BTC to USDT is not a taxable event?
You're not selling Bitcoin and then buying USDT. You're buying USDT with Bitcoin.
With your stock example, you can't buy shares of Apple stock using your Google stock. It has to go to fiat first which is a taxable event.
As said by sibling, trading crypto for crypto is still a taxable event in a lot of jurisdictions.