“It’s 2008 on crack.” Matt Taibbi on the collapse of crypto (audio)
Related – In what’s probably a sign of things going terribly wrong, two former billionaire crypto hedge-fund managers have disappeared, spurring a worldwide manhunt to find them as the broader industry freezes up
“If a stablecoin firm is taking your dollar and trying to make money lending it somewhere, they’re just “unregulated, uninsured, unaudited banks,” as one financial analyst puts it.”
A classic case of duration mismatch. Basically, borrow short term and lend long. If too many depositors decide they want their money back, the exchange has a problem. Unfortunately, this is not much different than what the modern banking system does with your deposits too. The main difference being that the central bank will bail the troubled banks out by loading the central bank’s balance sheets with toxic assets.
And when they ‘cash out’?
They converted to some currency.
We don’t have a Bitcoin acceptance in store or banks…
Ponzie but under a larger scale.
As someone gets Billions while everyone else gets the shaft…of closed accounts.
A theory I’ve heard which makes sense:
“Crypto is a deep state honey pot that was designed to divert investment funds that would have otherwise ended up in gold and silver. The importance was to hide the depth of the indebtedness and money printing because everyone would have panicked far sooner if gold and silver were trading at what they should be.”
Take it for what its worth.
Well, that’s interesting. Gives the deep state a lot of credit, though.
I’ve been mistrustful of crypto for a long time…seemed to fall into the “too good to be true” category, especially as no one seems to know who Satoshi really is. The appeal of “decentralised and not controlled by government” to me seemed almost like it was designed to suck in those mistrustful of central banks and governments, but not really giving what it advertised. Plus, it has no intrinsic value, and depends heavily on electrical and computational infrastructure always remaining in place.
YMMV on its worth and utility, but it’s not something I ever trusted. Time will tell if that was the wrong position to take.