Crypto's Great Financial Crisis: Everything You Need To Know (So Far)
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- čas přidán 4. 06. 2024
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Timestamps:
0:00 - introduction
0:57 - The Start
1:47 - Leverage
8:00 - Sponsor
9:02 - Contagion
10:33 - FTX Bailout
12:50 - FTX Downfall
16:01 - Who's Next
17:52 - What's Next
Attribution:
The research and scripting for this video was done in close collaboration with Oskar Matthey
Neon sign from: www.neonlights.be/discount/M&M15
Narrated and produced by Dr. Joeri Schasfoort (VU Amsterdam)
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@@vardekpetrovic9716 "for the most case noone knew they were part of such an volatile market. "
you actually believe this? literally everyone knows crypto is more volatile.
maybe that's why you lost 1.2 million.
@@gwho He means they didn't know where their funds were investing. Pension and retirement funds are supposed to be conservative with their investments, but it seems some weren't. The people using these funds don't micro-analyse where they put the money, just as customers of a bank don't check the banks financial reports. These are institutions that're taken to be safe precisely because they're meant to stay away from markets like crypto. It's the fund managers who betrayed that trust.
A far too complicated explanation of this speculative bubble called crypto which has zero lawful use and less value.
Sam bank man fried not Sam fried bank man
Binance is next
I love how Joeri refuses to get SBF's name right.
Patrick Boyle is rubbing off on him
@@PutXi_Whipped I'd love to see Patrick on his show again, cracking dry jokes at crypto bros
I was wondering if that was intentional.
he avoids invoking his spirit
@@stefanfrankel8157 it was definitely intentional
Imagine Warren Buffet, every decade getting these new kids telling him how they found a way to grow and harvest money trees
They would have been if they shifted all that money to a safe investment after making record profits. Instead they thought money train won't be having any stops.
@@gabbar51ngh what you’re describing is not investing. It’s musical chairs gambling.
@@kevinc8955 depending on the market some are indeed musical chairs.
There's reason derivatives market was called financial weapons of mass destruction by Warren Buffett. Not everyone's a passive investor who just puts his money in index or mutual funds looking to get a bit more out of his savings.
Numerous invested in these cryptos and pulled the money earlier so they are still enjoying it's profits. Any investment with high profits is potentially risky not just cryptos. You even see it in bond market when you realise high profit bonds are considered poor due to higher risk of default.
@@gabbar51ngh that is just a pull out scam, hot potato with way to much money
@@mam0lechinookclan607 They could have at least diversified it into some safer investments than just putting it all on crypto.
It was a dumb investing decision by them irrespective of crypto involvement or not.
somehow dogecoin was the most honest crypto this entire time… the value was always memes
In intention, maybe but eventually it got speculative
@@tomlxyz still more honest as it was and still is pure “memetic” value
@@tomlxyzI mean technically he is not wrong with his statement. I never heard official doge ever take itself seriously and always banked on the meme value(don’t know it’s current state, only know as of like 1.5 years ago)
Only a technically tho, if you are the working class you should view doge coin as also doing it purposefully
To the Moooooon!
Please ignore the Amazon crypto coin spam comments!
And all other bot comments (I will try to delete them when I get back to a desktop computer)
@@MoneyMacro Hey, maybe if crpto falls far enough, the bots will give us our comment section back. 🤣🤣🤣
Had to scroll a while to see this comment. Top comment is about AZ whatever numbers and letters with nearly as many likes as this vid within an hour. Hmm.
Why did you pronounce it Sam Friedman-Bank? Lmao
@@franklinhirsch1654 because he's a fried man and fried his bank
Sham Bankrupt Fraud is the greatest mocking nickname I've ever heard.
I thought it was 'Scam' 😅
Since hearing a few days ago Iv been thinking the same thing. Its just genius.
Scam/sham interchangeable in my books. Both perfect
@@steffen1405sham does alliterate with Sam better. Almost sounds like Sean Connery saying his name.
Missed opportunity: the hypothetical example should have been "Straight Arrow" vs "Broken Arrow" 🤣🤣🤣
🤯 💥
Excessive leverage really does seem like a nuclear self own!
@@krissp8712 Definitely radioactive.
John Woo wants his movie title back.
Or skyrim's arrow to the knee
And crypto bros used to say crypto will boom in a high inflation environment. 😂
I mean it did go boom. Just not the kind of boom they were claiming.
crypto bros are even worse than gold bugs. They woud say it booms in any environment because they understand nothing. Crypto is a product of QE and ZIRP. It along with shitcos like Tesla are the poster children for massive zombie economy bubble misallocation of capital.
When things collapse, what sound do they make? 😉
I love how the logic is that people losing purchasing power via inflation will for some reason put their precious money in a volatile speculative asset. I mean the crypto market is propped up by these big players, but how will it ever recover if retail investors are poorer and have already been bitten by this rotten system already. Are they supposed to trust any of these scammers? And before somebody says cold wallet-that immediately turns off most retail investors who already barely understand it. These exchanges gave them easy access
It did in 2021 when we saw all those price increases
That ending/blooper was absolute perfection.
The bigger story isn't about debt, contagion, regulations, or SBF - it's all about Digital Ponzi Tulips.
Hahahaha😂
Your ability to do research, condense the info, make it presentable and easy to understand is top notch 👏👏
He didn’t even get Sam Bankman-Fried’s name right
@@neofett9 I get the feeling it was on purpose 😂
My old man worked in finance (banking and insurance), and I've always been annoyed at how often people who talk about markets misunderstand even the basic core concepts, or clearly exaggerate them for their own benefit. You're right often enough about the small things that I'm willing to trust you on the big things. I've watched 6-7 of your videos, but now you've convinced me. All I have to give is my like and subscribe. Dankie.
15:30 Seamless rhetorical recovery when not all the desk dominoes fall. A true professional presenter! 🤣
Hahaha. It was unexpected. I'll admit
@@MoneyMacro An amateur would have redone the take. Instead, we got more analogy and a later callback in the later knockdown. Legend. 🤣🤣🤣
Another part I don't see many people talking about is that FTX was partly exposed and the exposure boosted by a direct competitor (I think Binance).
I think they thought they would get rid of a rival, but may well collapse the whole rotten business.
Yes, It's clear that FTX was more lucky and crooked than smart. You are touching on a rarely understood aspect of business... that sometimes your competition is symbiotic and is actually keeping you afloat (sometimes unintentionally and sometimes intentionally).
Just like Boeing wouldn't shit on Airbus (or vice versa) even if that means more airplanes sold at the expense of their competitor, because it'll spread fear of their products.
@@mikebaker2436 when is that the case other than in finance?
This isn't correct. CZ reached out to SBF several times because he knew something wasn't right. He only sold his (FTT) tokens after he received no response from SBF. The FTT tokens he sold were his own and he could sell them when he wanted. And do recall that Caroline offered to buy them all at $22.
@@tomlxyz Probably the easiest example would be industrial symbiosis between complex multinational companies... where reducing competitor's marketshare in one industry, reduces supply or services for your own subsidiary.
The return *OF* your money is more important than the return *ON* your money. - Will Rogers
Warren buffet rule #1 "don't lose money"
Rule #2 "Don't lose money"
Superb video! Also, Sam Bankman tried to bail out those other exchanges to prevent his FTT tokens from being liquidated.
... Proving he knew the fraud
Can you elaborate Please? I dont get it really 🙈
@@otmanh so ..this will sound insane. (Coffeezilla explains it better) Ftx created ftt and gave out FTT as colateral. This is insane. It means that if ftx drops in value at all it immediately begins a death spiral. This absolutely wouldnt be allowed in the financial markets and the company would be laughed off wall street
@@cdreid9999 fucking regulationsssss
@@kettelbe Losing your mind?
This is a good video (so far... still watching). It is contributing a neglected macro perspective to the current crypto problems.
Macro perspective is simple. Crypto is a ponzi scheme bubble which could only exist in a ZIRP world of endless monetary expansion. Fed policy is what enabled this to happen so perhaps the fed should continue to suck liquidity and raise rates until all crypto scum vanishes from this earth.
Attributing*?
Super grateful for these videos. I feel like I’m in an Ivy League economics class every time I watch
How do I really invest in bitcoin and make huge profits , i'm actually confused here, can someone please help me out
Same here, It's very confusing seeing so many people talk about the profits the make from there investment in bitcoin while I keep dipping from on win to a bigger loss
@@annienolen8175 Most time having knowledge or insight about a particular activity can as well be a pleasing exercise. I can boldly say that fx and bitcoin is one of the profitable money exchange services that elevates investors and their financial status.
@@eliotbrown5977 That's true most people today have been having a lot of failures in bitcoin because of poor orientation or bad experts
Bitcoin investment (fx) can be profitable and lucrative when it is approached as a business, but achieving a level of success is extremely difficult and can take a long time. It's a good idea to fine an expert of this form of investment prior to getting started with. As you can see, the market is open and operates 24 hours a day and almost seven days a week
@@annienolen8175 Hello!!, I will advise you find an expert around your vicinity to help you while you study the market. Fx investment is a process of which you have to understand these process before going into life trade
Thank you for this amazing, clear, and humorous explanation! I loved the "another big round of direct contagion" at 16:27!
You have a real talent for explaining difficult concepts in a clear and understandable way.
I consider myself to be a little above the average (when speaking of intelligence). But I really lose grasp after only a few sentences when I watch videos like this. I think that everyone one of them lack the concept of initial logic. And afterwards, everything is tangled up in economic slang. I'm convinced that everyone with the thorough knowledge of the theme speaking about can explain (that particular theme) in a few simple sentences. I've never heard anyone speaking about Crypto in a plain English. Behind Crypto is a simple addition and subtraction mathematics. It looks like I'll have to wait for someone to dumb it down for me
@@madjunac If you're so smart, why not try harder and get your own synthesis done?
@@jmsjms296 what a cool tip...
havent watched it all yet but THANK YOU I've been looking forward to your video on this knowing that you'd be taking a macro look at it :D Thank you so much Joeri!
Such a great and knowledgeable video.
Thanks a lot Joeri!
Lol! You keep calling him Friedman Bank and not Bankman Fried! 😂
Hahaha love the blooper at the end!
I find it hilarious some people didn't see this coming 🤣
Wait til tether tanks. Theyve used every lie and trick in the books to prop it up and theyre running out of tricks
Half of the financial world has money in crypto, people where making so much money did not care to question it.
Many still don't
Hey Jouri, Thank you for this clear video.
Every now and then I have a discussion with some friends on the term "crypto investment". I personally am of the opinion that you can't invest in crypto by buying crypto currencies but can only speculate.- It is possible to invest in crypto currencies by buying shares in a company that exploits the technology behind the currency. Although I'm not sure what the business model of those currencies would be.
My main argument is that currencies don't produce value on its own, hence you can only speculate on the demand. Ofcourse the service of transferring value does provide some value, but that is not what you are doing when you buy currencies by expecting the price to go up.
Maybe this question would fit well into a future video on "the value of crypto currencies".
His name is Joeri.
I think you're making sense and bring one or two key points. A currency, and that of course is a bit to the discretion of the banks and central bank in an economy, should have an opposite, active asset. Like in a ledger where on one side there is the house you want to build and on the other, there is what you owe the bank for it (and the bank has a similar ledger where they exchange similar debt requests with the central bank).
Neither your house nor the cash yet exist but once you and the bank shake on it you owe them a house in return for 1 house-equivalent paid to you in cash. Or you repay them - most people prefer that option as they get to keep the house.
I continually fail to discover however what the asset side of crypto would be. I mean Satoshi isn't going to give me guaranteed Dollar for my Bitcoin, so there's no debt. Needless to say there's no house. They burn a lot of energy, I hear, making the actual tokens but that's literally up in smoke and of no real future use. From a capital perspective I'd therefore agree - I'd also find it impossible to see how to "invest" in crypto. Maybe we're looking at it wrong and a future video WILL explain it?
Companies that exploit the technology would be something like graphics card companies that sell to crypto miners. Or even energy companies supplying electricity to mining operations. Unfortunately both still risk losing a lot of demand if they aren't diversified to wider markets and crypto collapses.
@@richteffekt I think it could be suggested that the “invest” part of crypto, from a typical perspective, is the expectation that crypto’s utility as a currency will be recognised more and more, and increasingly adopted, which creates a demand, where the scarcity mechanism then limits supply, which then will drive up value, providing early adopters with wealth increase.
The issue arises in that cryptography is not necessarily as practical as preexisting fintech, particularly since the development of NPP.
Realistically, if cryptocurrency can’t provide a practical edge over the newest traditional banking fintech, then the “investment” is nothing more than a pyramid scheme and an exercise in greater fool theory.
@@oiinahgiiusadurrybrahchuck7209 thanks for highlighting a possible trajectory for investors who might be interested. Personally I don't think that utility is the key issue (and that of course is just my humble opinion). Instead crypto's utility seems to also define its most useful application. Single, non- repeating transactions in fringe or dodgy environments where the involved parties neither trust the marketplace nor each other and therefore prefer resorting to a more practical version of the precious metal coins of the past.
Today's money on the other hand stores debt and is thus very different. And in most lasting business interactions, I think, debt and capital assets are the building blocks and a currency needs to map that. That is why I think that actual application of crypto- based transactions to be very much limited albeit it non-zero.
WHOA SO MUCH CONTENT IN A SHORT TIME!
The issue with crypto is that most investors practice this new trendy innovative investment approach I call 'brainless'
Yep, leverage (which is basically GREED) pretty much destroyed the crypto industry. It was a bad idea to utilize the stock market strategies to crypto.
I’ve always been skeptical of crypto, but it seems like it would work better if people actually treated it like currency. It isn’t and I believe that’s why it’s so unstable.
@@8eight104 It's the official currency of El Salvador and yet people are smart enough not to use it and prefer U.S. dollars.
@@floxy20 for most practical purposes, El Salvador is not a real country though.
Leverage isn't a creation of people trading in the stock market. Most people use leverage to buy a house, and that also pushes up prices.
The greed/fear cycle is an inherent feature of any speculative environment, not just stocks or in this case crypto.
Great content. Thanks. A point of style: you don't have to keep your hands in the air the entire time.
Amazing breakdown with included history.
Really good video! 👍
Though small nitpick. Unlike Celcius, FTX did NOT offer high interest loan. What they do is leveraging using funds that were not supposed to be leveraged. This means FTX could get in full legal trouble (Celcius used the "unsecured loan" loophole).
yes they did their product was called FTX Earn.. and even though some users were not using it. many were.
@@IvarDaigon per SBF, there was no way of separating deposited funds between the types of depositors so all funds were treated the same. This also meant people making withdrawal requests from a loaned pool were getting the money of non loaned depositors rather than taking a hit.
@@lonyo5377 yep and that's one good reason why you should never give your tokens to an any company that engages in speculative trading unless you're willing to accept the risks because even if the tokens are held in separate, buckets the temptation is too great for the management to temporarily 'borrow' those funds in order to cover short term losses.
As soon as your tokens are in a wallet that you yourself don't control there is always a risk of theft, loss or mismanagement.
Crypto firms are not banks, they are not 'too big to fail' and they are not going to get any government bailouts if they collapse.
Great video Joeri!
By far my favorite economics/"finance" channel
Always good stuff
Amazing video. Thank you :)
I hate it when people call the ones who are able to make big bucks as “.geniuses”, especially through shoddy methods. Wealth is not intelligence.
I believe that FTX bailed out block-fi to save Alameda, as if block-fi filed for bankruptcy, the enormous loans to Alameda would be called, and Alameda didn't have the money for that, and also their collateral for that loan was FTT. Im curious how this plays out
Yep, for sure.
Heh, the reason crypto goes up in price is speculation. Free debt = sky high prices. Wait until the next quantitative easing. The exact same thing will occur.
The next QA will obliterate what's left of the dollar tho, so that crypto is gonna be even more worthless
What really enabled the crypto boom this time was the next phase of monetary policy once we were already pushing on a string, that is debt monetization and the coordination of fiscal with monetary. US basically becoming like third world country. Bitcoin traded basically like 4x etf on speculative "innovation" or "tech" trading at 100x sales or whatever nonsense.
People have lost money, and trust as well. Quantitative easing will make them want to try recover losses but with a very high degree of lack of trust!
@@jeffhicks8428 Tesla in the same boat
@@jintarokensei3308 Absolutely. But that's my line. I've been trying to decide which is the bigger bubble, tsla or the cypto ponzi. With tsla at least going back to 2018, last time we had a tightening cycle, putting tsla weeks or days from bankruptcy, saved by the fed quickly pivoting back to expansion.
Very insightful well done report
Woah you're telling me that deflationary currencies with no inherent value will collapse like a house of cards when the masses try to take their money out? Who could've seen this coming?
I disagree with the idea that the contagion needs to be stopped; crypto as an industry deserves to die
Are you calling him "Friedman-Bank" as a joke? Or is that a mistake?
"friedman"😂
It's a mistake. He corrects it on the screen text when he mispronounces it for the first time.
I had money in blockfi and after celsius, I immediately took it all out. Got pretty lucky.
Yeah, that's how contagious bankruns work. 😋
@@mikebaker2436 good
Good for you
This video is great!!!!!
great job in refocusing the attention on what the real problem is!!!
A good analogy for what was going on in FTX/Alameda would be taking blood out of its left arm and injecting it into its right arm.
Bots are still bullish lol
LOL, the only ones....
Thank you.
a couple I know told me they keep about 20% of their savings in crypto and were hedging more and more each year.. this was in 2019... I haven't talked to them recently... they seem to be ignoring my calls.
Really good video
- You crypto thing is just imaginary value.
- No it's not!
- Yes it is.
- Oh man, it really is.
If only we could have seen this coming
This is like a children's show teaching banking. I love it!
Love your video
Loving watching all crypto ride down to it’s correct price of $0
Agreed! There will be efficiencies from the technology but they seem to be small. The financial markets are pretty efficient anyway.
Negative... Because all electricity wasted to to "mine" a.k.a solving useless calculations
@@ryansutedjo6704 The cost of mining is comparable to the cost of inflation of fiat currency.
More like 5-10$ as the storage tech at least is of some (real) value
This thing remind me of the South-Asian crisis, when the exchange rate of these countries fallen so bad that every one in the region couldn't solve a thing except of course Malaysia, south-Korea and Taiwan.
So for both south-Korea and Taiwan It was technically a U.S saving, but for Malaysia things were different since they used the currency pegging.
I'm not very well aware of the Crypto market but with a certain stabilization at least in the short term things can be lead to minimize the chain-rings effect along whit a big entrance to the fundamentalists to make some bridging toward the real economy.
Afterall the more separation between Finance and real economy, The more destabilization finance will face.
thank you so very much for your in debt videos! one thing i did not quite understand is why you consider grayscale a hedge fund if all it did was storing investors money in different crypto funds such as gbtc using Coinbase custody. i mean if genesis goes down and so dcg as a result cant they just liquidate their shares in the fund without dissolving it? i dont see how dissolving can benefit someone unless if those funds where mishandled which i find hard to belive because unlike ftx grayscale funds are grantor trusts which are regulated to some degree.
I really liked the graphics with straight arrow capital.
Binance has dropped their staking rewards drastically as the bear market has tanked. That’s what helps keep them afloat. If bear market continues they may have to continue dropping those rates.
If they can hang in there until the wind up to the Bitcoin halving, they'll do quite well.
If it’s crypto wouldn’t it be a
de-financial crises 😂 🥁
Also, bots are going crazy in the chat 🤖
I'm interested in an sustainability/economic analysis of crypto platforms. Specifically, where does money come from, where does it go, who's paying for the coin ecosystem to keep running, who are the main benefactors cashing out, etc...
We have an exchange here in the Philippines since 2017 at it has always remained to be an exchange and nothing else and they are already profitable
Is there any way to get stats on how much of the daily liquid supply of a token exists relative to the amount of that token pledged to cover loans?
Really starting to wonder if this space is even worth being in if we haven’t even seen the worst of it yet. There’s little upside and huge downside
I always been skeptical of crypto since it was interduce. When Daniel Nielsen said at 6:56 as his speech directly aimed at Warren Buffet, it an method been used here in Sweden so called "the ruler technique". Its like gaslighting but he wanted set a dominance, where he's always right when Warren is always wrong.
Funny how the whole crypto scene turns more and more like the banking system it was supposed to replace, even with bailouts now
Wheels getting reinvented.
Well FTX is not crypto it's a centrilised exchange. Not your private keys not your wallet.
@@KeinNiemand get used to it, people who still don't understand crypto never will.
@@KeinNiemand you may not like it but that's where the majority of crypto goes
Crypto reminds me a bit of the CDS boom, both had a valid reason for existence but greed ultimately got the best of them. I don’t think much of all the coins out there, as they are entirely built on the (speculative) hope that many consider them a store of value, but I do appreciate the digital innovation brought about, allowing for the tokenization (and trading) of illiquid and once inaccessible assets, such as real estate or private equity, thereby rendering them available to smaller investors, and I do believe that will be crypto’s legacy.
imho literally all crypro is, intentionally or not, a ponzi scheme.
I think another way to look at it is through the analysis of Mark Blyth in his book Austerity, although he doesn't actually address cryptocurrencies in that book.
Neoliberalism was all about reducing government spending as a signal to investors that there will be lower tax rates in the future, spurring investment in the present.
The problem with this theory is that it fails to recognize the role that government spending plays in cultivating economic activity.
Therefore, after decades of neoliberal policies, we have starved our economies to the point that there is no new space for investment. Where in the past our governments would have spent huge sums on major projects like railroads and the Hoover Dam, they instead chose to pull money out of the economy. As a result, we don't get the productive benefits of these major projects 10-20 years down the road. No Hoover Dam means no Las Vegas and all that investment opportunity is lost for years to come.
Now, we have economies that are tied to stagnant industries like oil and coal, with very little infrastructure in place to transition us into more profitable industries of the future like battery technology and chip manufacturing. This means that capital gets pushed out of productive development and into other asset classes such as real estate and cryptocurrency, causing bubbles.
Maybe in a world where we had ample productive investment opportunities, crypto would have been valued for it's blockchain technology rather than it's speculative value. But sadly that is not the case.
Joey rocking that turtle neck! Looking good 😉
Very clear explanation! Thanks for educating me :)
Part of a very important coin been talked about in the BCL
Gotta love the screwing around with the names; Sam Friedman Bank, Luna Terra :^ )
Is Crypto replicating Shadow Banking system or facing the same hurdlings that early 19-20th Century Banking.
What will happen to inflation if your remedy of fed reversing interest rate hikes is implemented ?
Thanks for bringing us up to speed with the whole crypto situation, but there's something that's been bugging me since i started watching the vid.
Why do you look like an older version of Derek Muller from Veritasium??
I wonder whether there is a possibility to create a lender/dealer of last resort in that crypto world. Just like Sam of FTX tried to rescue BlockFI. (Great content btw. This channel is really underrated otherwise it should have hit millions of subs)
So, crypto needs the "printing" of more fiat currency to support it's asset value. When I say asset value, I clearly use the words "asset" and "value" in the broadest possible senses. So much for "freedom" from reserve banks and governments. Crypto remains a problem looking for other applications and starting to find them. The solution seems to be fiat money and reality (and maybe a bit of gold if one is that way inclined).
It seems so rare to find a knowledgable video or article regarding crypto without the authors obvious biases ( for or against ) bleeding though. Straight information with a bit of candor. It is refreshing & very much appreciated.
Joeri, could you, please, not mispronounce the names of the subjects in your videos? One of your greatest strength is how neutral you are. And such practise may take that away.
Joeri, when these firms operate with leverage, who is paying the extra for that leverage? Where is the extra money coming from? And when the assets fall, who is charging them?
Its all a great story that we tell each other...as long as we believe each other i guess. The whole thing reminds me ofthe monopoly game, specifically the money used while playing it. That multicolored paper has definite value while playing that game, but is it an actual storage of value or perceived? Would i spend actual cash on this perceived value? Is my cash even a storage of value? Is gold? Its all individual self- interested perception games played out on a socioeconomic scale in the end- wether from an investor or corporation or SBF or whoevers place in the equation
I’m working on it.
What is the evidence that supports stopping a raise in IR or stimuli by the FED?
I don't get how injecting more money into the financial system is going to stop asset bubbles from forming and help stabilize inflation.
He doesn't mean stop bubbles from forming. He means that if money is cheap once again it is likely going to be used to speculate. Thus prop up the current crypto bubble.
You should come up with new ways to mess up SBF’s name if he comes up in future videos. Hearing it screwed up was unreasonably funny
Come for the crypto news, stay for you waving around those imaginary orbs ❤️
Is the same deleveraging coming to bonds?
Very high quality video. I would've maybe made a bigger case for comparison between how commercial banks and crypto exchanges actually have a similar structure in terms of liquidity. To be clearer, I mean that commercial banks, just like crypto exchanges, are not expected to have 100% cash reserves. But this also highlights the danger since exchanges, unlike banks, have no regulation - ie, they can hold MUCH riskier positions...
...and they lack government insurance, policy consolidations, and bailouts.
0:49 10:25 12:35 18:00 Sam Bankman-Fried!!!! Was he misnamed on purpoae?
Fundamentally none of these companies learned from the past banking failures. They were also not monitoring their level risk.
My FroogCoins and MemeTokens are safe, right?
contagion is not over, just can kicking at the moment but that can is beginning to harden with concrete
So basically crypto exchange or traditional funds, all are following the same mechanics..
Leveraged bets for higher yields (speculation or hedging) and when assets depreciate - margin call hits .. massive assets sales needed.. further depreciation.. contagion and the feedback loop.
Only thing is that traditional financial bets are more democratized- they are tied to common people's pensions or mortgaged homes. So central banks or govt will stop the contagion by doing what caused it again.. ( recent UK pension fiasco)
Funny world
Oh my, Saagar at the beginning! So glad to see more people internationally watching Breaking Points ❤️
FTX only stopped the contagion because BlockFi and Voyager had billions in rehypothecated FTT collateral to dump, which would've taken out FTX along side them. They eventually went down anyway.
Damn 3% of Bitcoin is almost 10billion. Is there that much dollar liquidity in the market? if we say there is 100billion total liquidity in BTC (f'ing generous) , then we're talking ~$5k price target for bitcoin if greyscale goes bust.
leverage due to rising asset prices - can this logic apply to USD index?
Buying the USD index means just holding USD and no one is giving you a loan that has low enough interest rates for that to work out
I think you have a maths error. Between the upside case study and the downside case study you’ve doubled the debt. In the downside case study it should be 25% debt not 50%
I'll watch the video tomorrow, but for now: watching the Netherlands play against Argentina today was amazing. What a game! I am Croatian, so I enjoyed our game more, but the Dutch were so interesting to watch. We will avenge you against Messi, hahah
This is video that everybody interested in crypto should watch. The moral of the story is don't let your ego carry you away from your senses. Stay grounded in the boring.
May I ask what’s your perspective on the other exchanges still out there (I.e. binance): I recently heard a lot of rumours and news about several potential issues (including the recent 2 billions dollar transactions, claimed by binance as being “necessary” and requested by the auditor). Any clue/insights on them being involved (voluntarily or involuntarily) into a similar circle as ftx, and/or if it’s likely they’ll be scrutinized/audited any time soon, and consequently eventually being a piece more to fall expanding furthermore the contagion? Very interesting analysis and summary!
Binance is shady as f. It is even unknown, where the company is registered.
@@tomo1168 one of the reasons I would definitely be interested in knowing more about it
@@hardstylelife5749 We will know more, wenn it will go bust :)
Coffeezilla covered binance. It wasnt good.
@@cdreid9999 good to know, thanks for the tip, I’ll check it out !